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have spot prices bottomed

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    Chinese spot iron ore prices increase by 3.5% - 23 Nov, 2008
    Bloomberg reported that cash prices of iron ore imported by China rose for a third week, gaining 3.5% after China unveiled a CNY 4 trillion stimulus plan.

    According to Beijing Antaike Information Development Co, prices at Qingdao advanced to CNY 600 a tonne. Prices gained 11% this month.

    China is investing in housing, railways, roads and airports to revive growth in the world's fourth largest economy, bolstering expectations steel consumption will gain. Prices of hot rolled coil, a benchmark product, gained 7.8% this week to CNY 3,543 a tonne, the first increase in 11 weeks.

    The production cost for China's smaller steelmakers is about CNY 3,200 for a tonne of hot rolled coil, used in buildings and automobiles.

    UBS AG has forecasted that China buys most of its spot iron ore from Indian producers. Long-term contract iron ore prices may drop 40% next year because steelmakers are cutting demand.

    Antaike is the research affiliate of China Nonferrous Metals Industry Association.

 
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