Brazil's Plan of Levying Export Tariff on Iron Ore Will Promote the Spot Price T

Recently, the Energy and Mines Minister of Brazil plans to levy export tariff on iron ore.

This measure is aimed to supplement part of the margin, because the cancellation of tax on domestic steel products will encourage the investment from domestic steel mill. The time starting to impose tax is not confirmed.

The aforementioned measure will undoubtedly promote the spot price trend of iron ore. In December 2009, India Government announced to impose 5% export tariff on fine iron ore and raised the export tariff on lump ore from 5% to 10%, which had led the continuously going up of spot price for iron ore in January 2010.

If Brazil also restricts the export of domestic iron ore, the conflict of supply and demand in iron ore market will become fiercely, which is not only a disbennifit for China iron ore negotiation, but make much effect on the global iron ore trade pattern.