Thu Sep 6, 2012
* Shanghai rebar rebounds after hitting record low
* But rebar still down 25 pct from 2012 peak
* No end in sight for iron ore rout-traders
By Manolo Serapio Jr
SINGAPORE, Sept 6 (Reuters) - Spot iron ore prices hit their weakest in nearly three years, extending a market rout that began in July and which is likely to continue as poor steel demand drove Shanghai steel futures to a record low on Thursday.
Iron ore prices have dropped 36 percent since early July, the hardest hit among industrial commodities by a slowdown in top buyer China whose economy is predicted to grow this year at its weakest pace in a decade.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI slipped 0.2 percent to $86.70 a tonne on Wednesday, according to data provider Steel Index.
That is the lowest price for the steelmaking raw material since October 2009, and less than half the 2011 peak of $191.90.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange hit a session low of 3,206 yuan a tonne on Thursday, a level unseen since the bourse launched rebar futures in 2009. It recovered to close up 1.3 percent at 3,271 yuan, tracking gains in Shanghai equities.
Rebar, or reinforcing steel bar used in construction, has fallen by around a quarter from this year's peak. Iron ore has slid 42 percent from its highest level this year.
"Unless steel demand picks up, iron ore has room to head down further. Both spot and futures steel prices are falling quite fast, there's no way for iron ore to go but down still," said a Shanghai-based iron ore trader.
The price of spot steel billet in China's key Tangshan area has fallen by 120 yuan, or about $19, to 2,730 yuan per tonne, over the past three days, traders said.
Another trader in Shanghai said his company is selling iron ore cargoes from its port stockpiles at $15-$20 per tonne less than the purchase price.
"And these are very small volumes, maximum is 5,000 tonnes. It's quite difficult to find customers who can buy 10,000 tonnes. They will ask for more discount if they take that volume," he said.
Rio Tinto, the world's No. 2 iron ore miner, sold 61-percent grade Australian Pilbara iron ore fines at $88.8 per tonne on Wednesday, down from $91.39 on Monday, traders said.
Rio is selling another 130,000 tonnes of Pilbara fines at a tender closing on Thursday, and traders say the price could slip further to $85-$86.
Top miner Vale sold 64.55-percent grade Brazilian Carajas fines at $95.01 on Wednesday, down from $101.78 last week for a similar grade.
Shanghai rebar futures and iron ore indexes at 0732 GMT
Contract Last Change Pct Change
SHFE REBAR JAN3 3271 +43.00 +1.33
PLATTS 62 PCT INDEX 88.75 -0.25 -0.28
THE STEEL INDEX 62 PCT INDEX 86.70 -0.20 -0.23
METAL BULLETIN INDEX 88.43 -0.75 -0.84
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.3492 Chinese yuan)
(Editing by Miral Fahmy)
* Shanghai rebar rebounds after hitting record low
* But rebar still down 25 pct from 2012 peak
* No end in sight for iron ore rout-traders
By Manolo Serapio Jr
SINGAPORE, Sept 6 (Reuters) - Spot iron ore prices hit their weakest in nearly three years, extending a market rout that began in July and which is likely to continue as poor steel demand drove Shanghai steel futures to a record low on Thursday.
Iron ore prices have dropped 36 percent since early July, the hardest hit among industrial commodities by a slowdown in top buyer China whose economy is predicted to grow this year at its weakest pace in a decade.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI slipped 0.2 percent to $86.70 a tonne on Wednesday, according to data provider Steel Index.
That is the lowest price for the steelmaking raw material since October 2009, and less than half the 2011 peak of $191.90.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange hit a session low of 3,206 yuan a tonne on Thursday, a level unseen since the bourse launched rebar futures in 2009. It recovered to close up 1.3 percent at 3,271 yuan, tracking gains in Shanghai equities.
Rebar, or reinforcing steel bar used in construction, has fallen by around a quarter from this year's peak. Iron ore has slid 42 percent from its highest level this year.
"Unless steel demand picks up, iron ore has room to head down further. Both spot and futures steel prices are falling quite fast, there's no way for iron ore to go but down still," said a Shanghai-based iron ore trader.
The price of spot steel billet in China's key Tangshan area has fallen by 120 yuan, or about $19, to 2,730 yuan per tonne, over the past three days, traders said.
Another trader in Shanghai said his company is selling iron ore cargoes from its port stockpiles at $15-$20 per tonne less than the purchase price.
"And these are very small volumes, maximum is 5,000 tonnes. It's quite difficult to find customers who can buy 10,000 tonnes. They will ask for more discount if they take that volume," he said.
Rio Tinto, the world's No. 2 iron ore miner, sold 61-percent grade Australian Pilbara iron ore fines at $88.8 per tonne on Wednesday, down from $91.39 on Monday, traders said.
Rio is selling another 130,000 tonnes of Pilbara fines at a tender closing on Thursday, and traders say the price could slip further to $85-$86.
Top miner Vale sold 64.55-percent grade Brazilian Carajas fines at $95.01 on Wednesday, down from $101.78 last week for a similar grade.
Shanghai rebar futures and iron ore indexes at 0732 GMT
Contract Last Change Pct Change
SHFE REBAR JAN3 3271 +43.00 +1.33
PLATTS 62 PCT INDEX 88.75 -0.25 -0.28
THE STEEL INDEX 62 PCT INDEX 86.70 -0.20 -0.23
METAL BULLETIN INDEX 88.43 -0.75 -0.84
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.3492 Chinese yuan)
(Editing by Miral Fahmy)
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