Wednesday, 16 February 2011
First of all, apologies for the long break from updating this blog, I promise you I have not been idle and there are lots of fantastic new things in the pipeline - all of which will be revealed here on the blog in due course. For now we have some important news that I wanted to share with everyone as quickly as possible - I just wish it were better news.
The offer price for high-grade iron ore passed $200/tonne earlier this week (Reuters). To put that into perspective, 12 months ago a tonne of iron ore on an annual contract was going for as little as $61/tonne (FT). Supplies of coking coal, another essential ingredient for steelmaking, have been interrupted because the floods in Australia have inundated mines which usually crank out 1.6 million tons of the stuff a week (Bloomberg).
Steelmakers and manufacturers have already soaked up as much of this price volatility as they can, so we are now being warned by several suppliers of imminent and substantial price rises with the possibility of more to follow. I understand that the price of wolfram (an ingredient of tungsten carbide) is also skyrocketing.
In an effort to give our customers a chance to respond we will not be adjusting prices until the end of the month, stocks permitting we will try to hold out for longer.