Mon Apr 22, 2013
* Iron ore hit a 3-month low of $132.90/tonne in mid-March
* Slow Chinese steel sales curbing iron ore appetite
By Manolo Serapio Jr
SINGAPORE, April 22 (Reuters) - Spot iron ore prices may approach their lowest level for the year this week with Chinese mills in no rush to stock up on the steelmaking raw material
given an uncertain outlook for steel demand in the world's top consumer.
Shanghai steel futures were steady on Monday, having recovered only modestly after hitting seven-month lows last week during a broad-based commodities selldown, suggesting investors
were not too confident that demand would gather pace in the near term.
"Mills are still in a slow mode in terms of buying any seaborne cargo especially if the shipment date is a bit forward," a Shanghai-based iron ore trader said.
"They would prefer to take prompt cargo, or those due to arrive in ports in one to two week's time, because they are sure where prices stand, for both iron ore and steel. When there's a
lot of uncertainty, mills won't take the risk of picking up forward cargoes."
Benchmark 62-percent grade iron ore .IO62-CNI=SI dropped 0.4 percent to $138 a tonne on Friday, the lowest level in almost two weeks, according to data provider Steel Index. The
price touched a low of $132.90 in mid-March.
"I think we will see a sustained fall in the price towards the $130 level," said the Shanghai trader.
Global miner Rio Tinto is offering 75,000 tonnes of 64.5-percent grade iron ore concentrate at a tender on Monday, and traders expect the cargo to be sold at lower than last week's $142.69 per tonne.
Rio sold a 165,000-tonne cargo of 61-percent grade Australian Pilbara iron ore fines at $137.95 per tonne at a tender on Friday, down from trades above $138 earlier last week, traders said.
Traders were expecting the price of 62-percent grade iron ore, which remains 13 percent below this year's peak, to rebound during the second quarter, the period seen as the busiest for
China's construction sector.
But big stockpiles of steel in China suggest that demand has yet to pick up strongly.
Investment bank Macquarie said the results of its steel survey in March of 40 steel mills, 30 steel traders and 30 iron ore traders showed that "neither mills nor traders have seen a
clear improvement in demand, but expectations remain that this is coming".
"Traders are signalling that they expect a pick-up in sales in April, and this should help inventory fall further," Macquarie said in a note.
Stocks of steel products in 22 Chinese cities hit a record 15.56 million tonnes in March, data from industry body the China Iron and Steel Association showed.
The most traded rebar contract for October delivery on the Shanghai Futures Exchange was little changed at 3,674 yuan ($590) a tonne by the midday break.
Rebar, or reinforcing bar, a steel product used in construction, touched a seven-month trough of 3,598 yuan last Thursday, ending the week down more than 4 percent, its steepest
such drop since late February.
Shanghai rebar futures and iron ore indexes at 0414 GMT
Contract Last Change Pct Change
SHFE REBAR OCT3 3674 +5.00 +0.14
THE STEEL INDEX 62 PCT INDEX 138 -0.60 -0.43
METAL BULLETIN INDEX 138.43 -0.42 -0.30
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.1776 Chinese yuan)
(Editing by Himani Sarkar)
* Iron ore hit a 3-month low of $132.90/tonne in mid-March
* Slow Chinese steel sales curbing iron ore appetite
By Manolo Serapio Jr
SINGAPORE, April 22 (Reuters) - Spot iron ore prices may approach their lowest level for the year this week with Chinese mills in no rush to stock up on the steelmaking raw material
given an uncertain outlook for steel demand in the world's top consumer.
Shanghai steel futures were steady on Monday, having recovered only modestly after hitting seven-month lows last week during a broad-based commodities selldown, suggesting investors
were not too confident that demand would gather pace in the near term.
"Mills are still in a slow mode in terms of buying any seaborne cargo especially if the shipment date is a bit forward," a Shanghai-based iron ore trader said.
"They would prefer to take prompt cargo, or those due to arrive in ports in one to two week's time, because they are sure where prices stand, for both iron ore and steel. When there's a
lot of uncertainty, mills won't take the risk of picking up forward cargoes."
Benchmark 62-percent grade iron ore .IO62-CNI=SI dropped 0.4 percent to $138 a tonne on Friday, the lowest level in almost two weeks, according to data provider Steel Index. The
price touched a low of $132.90 in mid-March.
"I think we will see a sustained fall in the price towards the $130 level," said the Shanghai trader.
Global miner Rio Tinto is offering 75,000 tonnes of 64.5-percent grade iron ore concentrate at a tender on Monday, and traders expect the cargo to be sold at lower than last week's $142.69 per tonne.
Rio sold a 165,000-tonne cargo of 61-percent grade Australian Pilbara iron ore fines at $137.95 per tonne at a tender on Friday, down from trades above $138 earlier last week, traders said.
Traders were expecting the price of 62-percent grade iron ore, which remains 13 percent below this year's peak, to rebound during the second quarter, the period seen as the busiest for
China's construction sector.
But big stockpiles of steel in China suggest that demand has yet to pick up strongly.
Investment bank Macquarie said the results of its steel survey in March of 40 steel mills, 30 steel traders and 30 iron ore traders showed that "neither mills nor traders have seen a
clear improvement in demand, but expectations remain that this is coming".
"Traders are signalling that they expect a pick-up in sales in April, and this should help inventory fall further," Macquarie said in a note.
Stocks of steel products in 22 Chinese cities hit a record 15.56 million tonnes in March, data from industry body the China Iron and Steel Association showed.
The most traded rebar contract for October delivery on the Shanghai Futures Exchange was little changed at 3,674 yuan ($590) a tonne by the midday break.
Rebar, or reinforcing bar, a steel product used in construction, touched a seven-month trough of 3,598 yuan last Thursday, ending the week down more than 4 percent, its steepest
such drop since late February.
Shanghai rebar futures and iron ore indexes at 0414 GMT
Contract Last Change Pct Change
SHFE REBAR OCT3 3674 +5.00 +0.14
THE STEEL INDEX 62 PCT INDEX 138 -0.60 -0.43
METAL BULLETIN INDEX 138.43 -0.42 -0.30
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.1776 Chinese yuan)
(Editing by Himani Sarkar)
No comments:
Post a Comment