Thu Mar 17, 2011 7:19am GMT
* Hopes of increased steel demand after Japan quake
* Indian 63.5 pct ore quoted at $170-$172/tonne
* Iron ore unlikely to hit $192 again this year-analyst
* China 2011 iron ore imports seen up 6 pct (Updates Shanghai rebar prices)
By Manolo Serapio Jr
SINGAPORE, March 17 (Reuters) - Spot iron ore prices stabilised on Thursday as steel prices in top producer China bounced back after recent losses, backed by hopes Beijing can export more overseas when quake-hit Japan begins reconstruction.
Japan overtook China as Asia's biggest steel exporter last year. But shipments from Tokyo may slow when the country focuses its output on rebuilding, opening a gap that may be filled by China as well as South Korea, Japan's biggest customer.
"Sentiment is slightly getting better because steel prices are moving up. We have more inquiries from the steel mills although purchases have not picked up yet," said an iron ore trader in Shanghai.
"Chinese mills are thinking they might have a good chance to sell their products and people are anticipating steel demand to pick up after the Japan disaster."
Power outages in Japan following last Friday's ferocious earthquake and tsunami will hit output of the world's second-largest producer and boost demand for China's steel products, a former official of the China Iron and Steel Association said on Thursday.
Spot steel prices have been slowly rising after dropping for two weeks, with steel billet in Tangshan up more than 80 yuan per tonne this week, said the Shanghai trader.
Shanghai steel rebar futures have rebounded 3.8 percent since hitting four-month lows on Monday. The most active October contract on the Shanghai Futures Exchange closed at 4,817 yuan a tonne on Thursday, down a modest 0.3 percent.
"Steel has pushed up in the last few days and these levels give the mills a very healthy margin," said an iron ore trader in Singapore.
Iron ore imports by top buyer China are forecast to rise 6 percent this year from nearly 619 million tonnes in 2010 on higher steel output, said an official from China's mining association.
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Offers for Indian ore with 63.5 percent iron content were steady at $170-$172 a tonne on Thursday, including freight, traders and Chinese consultancy Mysteel said.
But some analysts say iron ore prices could drop further in the near term on weaker demand from Japanese mills before a rebound that may be capped.
"Japanese steel mills will reduce their purchases in the short term which poses further downside risk in the seaborne market," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.
"We expect iron ore prices to rebound once steel demand recovers. However, it is unlikely to hit $192 per tonne again this year."
Spot iron ore prices had been falling since hitting a record high near $200 a tonne in mid-February as top buyer China slowed purchases after steel prices dropped.
Key iron ore indexes, which global miners use in setting quarterly contract rates, were steady to lower on Wednesday, while forward swaps jumped after a recent selloff.
Platts' 62 percent iron ore index IODBZ00-PLT was unchanged at $165 a tonne. That was previously the lowest for the index since Nov. 25.
Steel Index's 62 percent benchmark .IO62-CNI=SI slipped $1.10 to $163.60, a level not seen since Nov. 19. Metal Bulletin's 62 percent gauge .IO62-CNO=MB eased a dollar to $162.89, its weakest since Dec. 6.
Singapore Exchange-cleared forward swap prices rebounded although they remained at steep discount to spot prices. The April contract rose more than 4 percent to $153.33 a tonne and May climbed 3.6 percent to $151.58. (Additional reporting by Ruby Lian in Shanghai Editing by Ed Lane,sourced:Reuters)
* Indian 63.5 pct ore quoted at $170-$172/tonne
* Iron ore unlikely to hit $192 again this year-analyst
* China 2011 iron ore imports seen up 6 pct (Updates Shanghai rebar prices)
By Manolo Serapio Jr
SINGAPORE, March 17 (Reuters) - Spot iron ore prices stabilised on Thursday as steel prices in top producer China bounced back after recent losses, backed by hopes Beijing can export more overseas when quake-hit Japan begins reconstruction.
Japan overtook China as Asia's biggest steel exporter last year. But shipments from Tokyo may slow when the country focuses its output on rebuilding, opening a gap that may be filled by China as well as South Korea, Japan's biggest customer.
"Sentiment is slightly getting better because steel prices are moving up. We have more inquiries from the steel mills although purchases have not picked up yet," said an iron ore trader in Shanghai.
"Chinese mills are thinking they might have a good chance to sell their products and people are anticipating steel demand to pick up after the Japan disaster."
Power outages in Japan following last Friday's ferocious earthquake and tsunami will hit output of the world's second-largest producer and boost demand for China's steel products, a former official of the China Iron and Steel Association said on Thursday.
Spot steel prices have been slowly rising after dropping for two weeks, with steel billet in Tangshan up more than 80 yuan per tonne this week, said the Shanghai trader.
Shanghai steel rebar futures have rebounded 3.8 percent since hitting four-month lows on Monday. The most active October contract on the Shanghai Futures Exchange closed at 4,817 yuan a tonne on Thursday, down a modest 0.3 percent.
"Steel has pushed up in the last few days and these levels give the mills a very healthy margin," said an iron ore trader in Singapore.
Iron ore imports by top buyer China are forecast to rise 6 percent this year from nearly 619 million tonnes in 2010 on higher steel output, said an official from China's mining association.
MORE DOWNSIDE SEEN
Offers for Indian ore with 63.5 percent iron content were steady at $170-$172 a tonne on Thursday, including freight, traders and Chinese consultancy Mysteel said.
But some analysts say iron ore prices could drop further in the near term on weaker demand from Japanese mills before a rebound that may be capped.
"Japanese steel mills will reduce their purchases in the short term which poses further downside risk in the seaborne market," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.
"We expect iron ore prices to rebound once steel demand recovers. However, it is unlikely to hit $192 per tonne again this year."
Spot iron ore prices had been falling since hitting a record high near $200 a tonne in mid-February as top buyer China slowed purchases after steel prices dropped.
Key iron ore indexes, which global miners use in setting quarterly contract rates, were steady to lower on Wednesday, while forward swaps jumped after a recent selloff.
Platts' 62 percent iron ore index IODBZ00-PLT was unchanged at $165 a tonne. That was previously the lowest for the index since Nov. 25.
Steel Index's 62 percent benchmark .IO62-CNI=SI slipped $1.10 to $163.60, a level not seen since Nov. 19. Metal Bulletin's 62 percent gauge .IO62-CNO=MB eased a dollar to $162.89, its weakest since Dec. 6.
Singapore Exchange-cleared forward swap prices rebounded although they remained at steep discount to spot prices. The April contract rose more than 4 percent to $153.33 a tonne and May climbed 3.6 percent to $151.58. (Additional reporting by Ruby Lian in Shanghai Editing by Ed Lane,sourced:Reuters)
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