Mon Sep 10, 2012
* Iron ore rises more than 2 pct on Friday, sellers up offers
* China Aug iron ore imports rise to 3-month high
By Manolo Serapio Jr
SINGAPORE, Sept 10 (Reuters) - China steel futures rose for a second day on Monday, supported by hopes that Beijing's approval of more than $150 billion in infrastructure projects would resuscitate steel demand, providing fuel for a recovery in iron ore prices.
Price offers for imported iron ore cargoes in China rose by up to $4 per tonne on Monday, after the benchmark rate .IO62-CNI=SI jumped by $2, or 2.3 percent, to $89 a tonne on Friday.
"There's more interest now from buyers to get iron ore cargoes even at prices slightly higher than previous deals. Sentiment's better," said an iron ore trader in Shanghai.
China's economic planning body on Friday approved projects to build highways, ports and airport runways, that analysts estimate at more than 1 trillion yuan ($158 billion), roughly a quarter the size of the massive stimulus package unleashed in response to the global financial crisis in 2008.
Shanghai rebar futures surged by their 5 percent limit on Friday on the news, and spot iron ore prices posted their biggest daily percentage gain since December 2011.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange hit a two-week high of 3,483 yuan a tonne on Monday, before paring gains to 3,439 yuan by 0530 GMT.
"I guess the market's divided now. Half expect the price gains to continue while the other half are still pessimistic," said another Shanghai-based trader.
Miners BHP Billiton and Rio Tinto sold iron ore cargoes on Friday at prices that were $1-$2 per tonne higher than previous deals, traders said, after selling mostly at lower prices since a market rout that began in July.
BHP Billiton is selling more cargoes at a tender on Monday -- 100,000 tonnes of 62.7-percent grade Australian Newman iron ore fines and 90,000 tonnes of 57.7-percent grade Yandi fines, traders said.
Brazil's Vale, the world's top iron ore miner, is selling two cargoes -- 134,000 tonnes of 63.36-percent grade iron ore lumps and 176,000 tonnes of 64.98-percent grade Carajas fines, said traders.
Traders expect prices at both tenders to rise further.
CHINA IMPORTS RISE
"We would take this chance to clear our stocks at higher prices. We already received offers that are 30 to 50 yuan higher than the last offers," said the first trader.
Despite the firmer offers, he said the prices were still about $10 less than the purchase price of the cargoes, totalling about 200,000 tonnes.
The second trader said he had yet to hear from clients and doubted whether Friday's iron ore price rise would last.
China's imports of iron ore in August rose 7.9 percent from the previous month to a three-month high of 62.45 million tonnes, data showed on Monday, with buyers turning to the international market as a collapse in prices forced domestic producers to slash output.
"This was largely expected. Imports stayed high in August because these orders were made in July or earlier. But this certainly implies that there's oversupply in China," said Helen Lau, senior commodities analyst at UOB-Kay Hian in Hong Kong.
"We think iron ore prices are still under downside pressure and we maintain our view that in the coming months, iron ore imports will come down to around 30 million to 40 million tonnes. China has a high iron ore inventory, steel production has peaked and demand is weak."
Shanghai rebar futures and iron ore indexes at 0530 GMT
Contract Last Change Pct Change
SHFE REBAR JAN3 3439 +33.00 +0.97
PLATTS 62 PCT INDEX 90.75 +2.25 +2.54
THE STEEL INDEX 62 PCT INDEX 89.00 +2.00 +2.30
METAL BULLETIN INDEX 91.38 +3.30 +3.75
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1=6.3430 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Clarence Fernandez)
* Iron ore rises more than 2 pct on Friday, sellers up offers
* China Aug iron ore imports rise to 3-month high
By Manolo Serapio Jr
SINGAPORE, Sept 10 (Reuters) - China steel futures rose for a second day on Monday, supported by hopes that Beijing's approval of more than $150 billion in infrastructure projects would resuscitate steel demand, providing fuel for a recovery in iron ore prices.
Price offers for imported iron ore cargoes in China rose by up to $4 per tonne on Monday, after the benchmark rate .IO62-CNI=SI jumped by $2, or 2.3 percent, to $89 a tonne on Friday.
"There's more interest now from buyers to get iron ore cargoes even at prices slightly higher than previous deals. Sentiment's better," said an iron ore trader in Shanghai.
China's economic planning body on Friday approved projects to build highways, ports and airport runways, that analysts estimate at more than 1 trillion yuan ($158 billion), roughly a quarter the size of the massive stimulus package unleashed in response to the global financial crisis in 2008.
Shanghai rebar futures surged by their 5 percent limit on Friday on the news, and spot iron ore prices posted their biggest daily percentage gain since December 2011.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange hit a two-week high of 3,483 yuan a tonne on Monday, before paring gains to 3,439 yuan by 0530 GMT.
"I guess the market's divided now. Half expect the price gains to continue while the other half are still pessimistic," said another Shanghai-based trader.
Miners BHP Billiton and Rio Tinto sold iron ore cargoes on Friday at prices that were $1-$2 per tonne higher than previous deals, traders said, after selling mostly at lower prices since a market rout that began in July.
BHP Billiton is selling more cargoes at a tender on Monday -- 100,000 tonnes of 62.7-percent grade Australian Newman iron ore fines and 90,000 tonnes of 57.7-percent grade Yandi fines, traders said.
Brazil's Vale, the world's top iron ore miner, is selling two cargoes -- 134,000 tonnes of 63.36-percent grade iron ore lumps and 176,000 tonnes of 64.98-percent grade Carajas fines, said traders.
Traders expect prices at both tenders to rise further.
CHINA IMPORTS RISE
"We would take this chance to clear our stocks at higher prices. We already received offers that are 30 to 50 yuan higher than the last offers," said the first trader.
Despite the firmer offers, he said the prices were still about $10 less than the purchase price of the cargoes, totalling about 200,000 tonnes.
The second trader said he had yet to hear from clients and doubted whether Friday's iron ore price rise would last.
China's imports of iron ore in August rose 7.9 percent from the previous month to a three-month high of 62.45 million tonnes, data showed on Monday, with buyers turning to the international market as a collapse in prices forced domestic producers to slash output.
"This was largely expected. Imports stayed high in August because these orders were made in July or earlier. But this certainly implies that there's oversupply in China," said Helen Lau, senior commodities analyst at UOB-Kay Hian in Hong Kong.
"We think iron ore prices are still under downside pressure and we maintain our view that in the coming months, iron ore imports will come down to around 30 million to 40 million tonnes. China has a high iron ore inventory, steel production has peaked and demand is weak."
Shanghai rebar futures and iron ore indexes at 0530 GMT
Contract Last Change Pct Change
SHFE REBAR JAN3 3439 +33.00 +0.97
PLATTS 62 PCT INDEX 90.75 +2.25 +2.54
THE STEEL INDEX 62 PCT INDEX 89.00 +2.00 +2.30
METAL BULLETIN INDEX 91.38 +3.30 +3.75
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1=6.3430 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Clarence Fernandez)
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