Thu Jan 31, 2013
* Pricier China port stocks prompt mills to seek seaborne cargoes
* Iron ore monthly gain cut to 3 pct in Jan from 25 pct in Dec
By Manolo Serapio Jr
SINGAPORE, Jan 31 (Reuters) - Iron ore hit two-week highs as some Chinese steelmakers bought spot cargoes with few shipments on offer, but further price gains are likely to be modest with most mills adequately stocked for the week-long Lunar New Year holiday next month.
There have been limited cargoes offered in the spot market this week, forcing buyers seeking prompt cargoes to purchase from stockpiles held at Chinese ports where prices have risen as inventories fell.
Iron ore at ports has been trading at a $4 per tonne premium against fresh seaborne cargoes, said Jamie Pearce, head of broking at SSY Futures.
"There is still appetite from mills to take cargo, but I think they're not in a restocking phase that we have seen a lot recently. They have been living hand to mouth with port stocks," said Pearce.
"But with the port stocks trading at such a premium and not a flood of seaborne cargoes, probably for a larger size mill, it still makes sense for them to take (spot seaborne) cargoes."
Iron ore inventories at major Chinese ports have fallen to just above 69 million tonnes currently from a high of 96 million tonnes in early September last year, based on estimates by Australia and New Zealand Bank.
A 165,000-tonne cargo of Australian 61-percent grade Pilbara iron ore fines was traded at $151 a tonne on the trading platform run by China Beijing International Mining Exchange on Thursday, traders said.
That was the same price paid for the resale of a spot Pilbara fines cargo on Wednesday, but both were up $5 from early last week, a trader said.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI rose 0.7 percent to $149.40 a tonne on Wednesday, after four days of barely moving, based on data from Steel Index. That was the highest since Jan. 15.
Iron ore prices hit a 15-month peak of $158.50 on Jan. 8 but have since wobbled as a Chinese restocking spree that began in December waned. For the month, the raw material is up just 3 percent versus a 25 percent jump in December.
Miners from Australia and Brazil have offered fewer spot cargoes as unfavourable weather has disrupted shipments and traders said they could also be selling more through long-term contracts with mills.
Price offers for Australian and Brazilian iron ore cargoes along with other imported shipments in China rose up to $2 per tonne on Thursday, according to Chinese consultancy Umetal.
"There's no trader willing to give any discount at the moment. They are either selling higher or waiting until after the Chinese New Year," said an iron ore trader in Shanghai.
For buyers, firmer steel prices in China are boosting confidence in purchasing iron ore at current prices.
Shanghai rebar futures hovered near 8-1/2-month highs on Thursday, hitting a session high of 4,127 yuan ($660) a tonne, just a tad below Wednesday's intraday peak of 4,131 yuan, which was the highest since May 2012.
Shanghai rebar futures and iron ore indexes at 0532 GMT
Contract Last Change Pct Change
SHFE REBAR MAY3 4112 +3.00 +0.07
THE STEEL INDEX 62 PCT INDEX 149.4 +1.00 +0.67
METAL BULLETIN INDEX 150.25 +0.91 +0.61
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2204 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)
* Pricier China port stocks prompt mills to seek seaborne cargoes
* Iron ore monthly gain cut to 3 pct in Jan from 25 pct in Dec
By Manolo Serapio Jr
SINGAPORE, Jan 31 (Reuters) - Iron ore hit two-week highs as some Chinese steelmakers bought spot cargoes with few shipments on offer, but further price gains are likely to be modest with most mills adequately stocked for the week-long Lunar New Year holiday next month.
There have been limited cargoes offered in the spot market this week, forcing buyers seeking prompt cargoes to purchase from stockpiles held at Chinese ports where prices have risen as inventories fell.
Iron ore at ports has been trading at a $4 per tonne premium against fresh seaborne cargoes, said Jamie Pearce, head of broking at SSY Futures.
"There is still appetite from mills to take cargo, but I think they're not in a restocking phase that we have seen a lot recently. They have been living hand to mouth with port stocks," said Pearce.
"But with the port stocks trading at such a premium and not a flood of seaborne cargoes, probably for a larger size mill, it still makes sense for them to take (spot seaborne) cargoes."
Iron ore inventories at major Chinese ports have fallen to just above 69 million tonnes currently from a high of 96 million tonnes in early September last year, based on estimates by Australia and New Zealand Bank.
A 165,000-tonne cargo of Australian 61-percent grade Pilbara iron ore fines was traded at $151 a tonne on the trading platform run by China Beijing International Mining Exchange on Thursday, traders said.
That was the same price paid for the resale of a spot Pilbara fines cargo on Wednesday, but both were up $5 from early last week, a trader said.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI rose 0.7 percent to $149.40 a tonne on Wednesday, after four days of barely moving, based on data from Steel Index. That was the highest since Jan. 15.
Iron ore prices hit a 15-month peak of $158.50 on Jan. 8 but have since wobbled as a Chinese restocking spree that began in December waned. For the month, the raw material is up just 3 percent versus a 25 percent jump in December.
Miners from Australia and Brazil have offered fewer spot cargoes as unfavourable weather has disrupted shipments and traders said they could also be selling more through long-term contracts with mills.
Price offers for Australian and Brazilian iron ore cargoes along with other imported shipments in China rose up to $2 per tonne on Thursday, according to Chinese consultancy Umetal.
"There's no trader willing to give any discount at the moment. They are either selling higher or waiting until after the Chinese New Year," said an iron ore trader in Shanghai.
For buyers, firmer steel prices in China are boosting confidence in purchasing iron ore at current prices.
Shanghai rebar futures hovered near 8-1/2-month highs on Thursday, hitting a session high of 4,127 yuan ($660) a tonne, just a tad below Wednesday's intraday peak of 4,131 yuan, which was the highest since May 2012.
Shanghai rebar futures and iron ore indexes at 0532 GMT
Contract Last Change Pct Change
SHFE REBAR MAY3 4112 +3.00 +0.07
THE STEEL INDEX 62 PCT INDEX 149.4 +1.00 +0.67
METAL BULLETIN INDEX 150.25 +0.91 +0.61
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2204 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)
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