Tue Feb 19, 2013
* Price nears 15-month high of close to $160
* Sale of Australian iron ore fines tops market expectations
* Gains backed by firmer Chinese spot steel prices
By Manolo Serapio Jr
SINGAPORE, Feb 19 (Reuters) - Spot iron ore prices rose to their highest level in more than a month, closing in on 15-month highs reached in January, as mills from top buyer China replenished inventories hoping steel demand will soon gain traction.
Demand for steel in China, the world's biggest consumer and producer, typically revives after the Chinese New Year as construction activity resumes following the winter freeze, allowing big miners such as Vale and Rio Tinto to sell more iron ore to their top market.
It was shortly after the Lunar New Year when iron ore prices hit a record high of nearly $200 per tonne in February 2011, and traders expect prices to top the 2013 peak of almost $160 in the coming days.
"Iron ore has always rallied after the Chinese New Year holiday as mills come back, keen to restock iron ore ahead of the spring time in China and the uptick in steel demand and steel prices," said Rory MacDonald, iron ore broker at Freight Investor Services.
"For the next days and probably weeks, we might see iron ore prices pretty well supported."
Benchmark 62-percent grade iron ore for delivery to China .IO62-CNI=SI climbed 1.4 percent to $157.20 a tonne on Monday, the highest since Jan. 10, based on data from price publisher Steel Index.
The sale of Australian Pilbara iron ore fines at a much higher-than-expected price at a spot tender helped lift the value, putting it closer to the Jan. 8 level of $158.50 which was the highest since October 2011.
Rio Tinto sold 165,000 tonnes of 61-percent grade Pilbara Blend iron ore fines at $160.66 a tonne, much higher than a previous sale of $153 and surpassing market expectations, traders said.
"It looked a little bit overdone although there was some fierce competition for the cargo," said a physical trader in Singapore.
Traders said Vale is offering to sell 80,000 tonnes of 64.7-percent grade Brazilian iron ore at a tender closing later on Tuesday.
A similar 64.48-percent grade Brazilian cargo traded at $161.61 a tonne in late January, traders said.
Firmer Chinese steel prices are supporting the renewed appetite for iron ore after the Feb. 11-15 Spring Festival break, with spot billet in the key Tangshan area gaining 20 yuan to 3,330 yuan ($530) per tonne on Monday, traders said.
A number of Chinese steel mills have raised their March prices in anticipation of a pickup in demand.
Baoshan Iron & Steel, the country's biggest steelmaker by market value, earlier raised prices for a fourth straight month when it hiked March booking prices for its main steel products.
Shanghai rebar futures and iron ore indexes at 0400 GMT
Contract Last Change Pct Change
SHFE REBAR OCT3 4189 -19.00 -0.45
THE STEEL INDEX 62 PCT INDEX 157.2 +2.10 +1.35
METAL BULLETIN INDEX 160.82 +4.93 +3.16
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2427 Chinese yuan)
(Editing by Himani Sarkar)
* Price nears 15-month high of close to $160
* Sale of Australian iron ore fines tops market expectations
* Gains backed by firmer Chinese spot steel prices
By Manolo Serapio Jr
SINGAPORE, Feb 19 (Reuters) - Spot iron ore prices rose to their highest level in more than a month, closing in on 15-month highs reached in January, as mills from top buyer China replenished inventories hoping steel demand will soon gain traction.
Demand for steel in China, the world's biggest consumer and producer, typically revives after the Chinese New Year as construction activity resumes following the winter freeze, allowing big miners such as Vale and Rio Tinto to sell more iron ore to their top market.
It was shortly after the Lunar New Year when iron ore prices hit a record high of nearly $200 per tonne in February 2011, and traders expect prices to top the 2013 peak of almost $160 in the coming days.
"Iron ore has always rallied after the Chinese New Year holiday as mills come back, keen to restock iron ore ahead of the spring time in China and the uptick in steel demand and steel prices," said Rory MacDonald, iron ore broker at Freight Investor Services.
"For the next days and probably weeks, we might see iron ore prices pretty well supported."
Benchmark 62-percent grade iron ore for delivery to China .IO62-CNI=SI climbed 1.4 percent to $157.20 a tonne on Monday, the highest since Jan. 10, based on data from price publisher Steel Index.
The sale of Australian Pilbara iron ore fines at a much higher-than-expected price at a spot tender helped lift the value, putting it closer to the Jan. 8 level of $158.50 which was the highest since October 2011.
Rio Tinto sold 165,000 tonnes of 61-percent grade Pilbara Blend iron ore fines at $160.66 a tonne, much higher than a previous sale of $153 and surpassing market expectations, traders said.
"It looked a little bit overdone although there was some fierce competition for the cargo," said a physical trader in Singapore.
Traders said Vale is offering to sell 80,000 tonnes of 64.7-percent grade Brazilian iron ore at a tender closing later on Tuesday.
A similar 64.48-percent grade Brazilian cargo traded at $161.61 a tonne in late January, traders said.
Firmer Chinese steel prices are supporting the renewed appetite for iron ore after the Feb. 11-15 Spring Festival break, with spot billet in the key Tangshan area gaining 20 yuan to 3,330 yuan ($530) per tonne on Monday, traders said.
A number of Chinese steel mills have raised their March prices in anticipation of a pickup in demand.
Baoshan Iron & Steel, the country's biggest steelmaker by market value, earlier raised prices for a fourth straight month when it hiked March booking prices for its main steel products.
Shanghai rebar futures and iron ore indexes at 0400 GMT
Contract Last Change Pct Change
SHFE REBAR OCT3 4189 -19.00 -0.45
THE STEEL INDEX 62 PCT INDEX 157.2 +2.10 +1.35
METAL BULLETIN INDEX 160.82 +4.93 +3.16
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2427 Chinese yuan)
(Editing by Himani Sarkar)
No comments:
Post a Comment