Tue Oct 30, 2012
* Baosteel sees margins at risk from rebound in raw material prices
* China iron ore port stocks fall for third week in a row
By Manolo Serapio Jr
SINGAPORE, Oct 30 (Reuters) - Iron ore prices held steady on Tuesday even though buyers from top importer China slowed their purchases, with another round of restocking by Chinese steel mills next month ahead of winter expected to keep prices elevated.
The iron ore market has gradually recovered from last month's three-year lows. Improved profit margins among Chinese steelmakers since September has helped lift demand for the raw material from the world's biggest steel consumer.
Price offers for imported iron ore cargoes in China were unchanged on Tuesday, a day after the benchmark 62-percent grade iron ore .IO62-CNI=SI gained 0.3 percent to $120 per tonne, based on data from Steel Index.
"There's no rush to buy, but I believe iron ore prices can rise another $5 by early next month when mills start restocking for the winter," said a trader from the port city of Rizhao in China's eastern Shandong province.
Smaller mills with immediate needs for cargoes of between 5,000 and 10,000 tonnes have been buying from stockpiles at Chinese ports, he said, which are usually sold cheaper than fresh seaborne shipments.
Inventories of iron ore at major Chinese ports fell 1.2 million tonnes to 94.75 million tonnes last week SH-TOT-IRONINV, dropping for a third week in a row, data from Chinese consultancy Steelhome showed.
"I'm seeing strong demand for iron ore for prompt delivery, or those arriving in China before end-November," said a trader in Hong Kong.
"This is because mills are trying to secure their raw material supply as they are closing up their order books for steel products for December delivery."
Shanghai rebar futures were little changed at 3,625 yuan ($580) a tonne by the midday break, with spot steel prices in China similarly steady.
Rebar, used in construction, has rebounded more than 12 percent from September lows, spurred by a modest revival in construction activity, lifting margins of producers that have been squeezed by prices sliding to three-year lows last month.
But prices remain 17 percent below this year's peak.
Baoshan Iron and Steel Co Ltd, China's biggest listed steelmaker, said it was not optimistic about its performance through the first quarter of 2013 because margins would suffer from rebounding coal and iron ore prices.
Baosteel, which posted a 4.9 percent drop in third-quarter profit, said it expects steel prices to stabilise in October-December although the industry will renmain plagued by oversupply.
Shanghai rebar futures and iron ore indexes at 0442 GMT
Contract Last Change Pct Change
SHFE REBAR MAY3 3625 +6.00 +0.17
PLATTS 62 PCT INDEX 120.5 +0.00 +0.00
THE STEEL INDEX 62 PCT INDEX 120 +0.40 +0.33
METAL BULLETIN INDEX 120.67 -0.09 -0.07
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2436 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Jacqueline Wong)
* Baosteel sees margins at risk from rebound in raw material prices
* China iron ore port stocks fall for third week in a row
By Manolo Serapio Jr
SINGAPORE, Oct 30 (Reuters) - Iron ore prices held steady on Tuesday even though buyers from top importer China slowed their purchases, with another round of restocking by Chinese steel mills next month ahead of winter expected to keep prices elevated.
The iron ore market has gradually recovered from last month's three-year lows. Improved profit margins among Chinese steelmakers since September has helped lift demand for the raw material from the world's biggest steel consumer.
Price offers for imported iron ore cargoes in China were unchanged on Tuesday, a day after the benchmark 62-percent grade iron ore .IO62-CNI=SI gained 0.3 percent to $120 per tonne, based on data from Steel Index.
"There's no rush to buy, but I believe iron ore prices can rise another $5 by early next month when mills start restocking for the winter," said a trader from the port city of Rizhao in China's eastern Shandong province.
Smaller mills with immediate needs for cargoes of between 5,000 and 10,000 tonnes have been buying from stockpiles at Chinese ports, he said, which are usually sold cheaper than fresh seaborne shipments.
Inventories of iron ore at major Chinese ports fell 1.2 million tonnes to 94.75 million tonnes last week SH-TOT-IRONINV, dropping for a third week in a row, data from Chinese consultancy Steelhome showed.
"I'm seeing strong demand for iron ore for prompt delivery, or those arriving in China before end-November," said a trader in Hong Kong.
"This is because mills are trying to secure their raw material supply as they are closing up their order books for steel products for December delivery."
Shanghai rebar futures were little changed at 3,625 yuan ($580) a tonne by the midday break, with spot steel prices in China similarly steady.
Rebar, used in construction, has rebounded more than 12 percent from September lows, spurred by a modest revival in construction activity, lifting margins of producers that have been squeezed by prices sliding to three-year lows last month.
But prices remain 17 percent below this year's peak.
Baoshan Iron and Steel Co Ltd, China's biggest listed steelmaker, said it was not optimistic about its performance through the first quarter of 2013 because margins would suffer from rebounding coal and iron ore prices.
Baosteel, which posted a 4.9 percent drop in third-quarter profit, said it expects steel prices to stabilise in October-December although the industry will renmain plagued by oversupply.
Shanghai rebar futures and iron ore indexes at 0442 GMT
Contract Last Change Pct Change
SHFE REBAR MAY3 3625 +6.00 +0.17
PLATTS 62 PCT INDEX 120.5 +0.00 +0.00
THE STEEL INDEX 62 PCT INDEX 120 +0.40 +0.33
METAL BULLETIN INDEX 120.67 -0.09 -0.07
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2436 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Jacqueline Wong)
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