Iron Ore-Shanghai rebar at 2-week top, but down on month

Thu Jun 30, 2011

* Spot iron ore fall to fresh 3-month lows
* BHP sells 180,000-190,000 T of fines via tender
By Manolo Serapio Jr

SINGAPORE, June 30 (Reuters) - Chinese steel futures edged up 0.6 percent to two-week highs on Thursday in a technical bounce after recent losses, but a second straight month of decline for prices in June clouds the outlook for demand in the third quarter.

A lull in steel demand in top consumer China has weighed on spot iron ore prices .IO62-CNI=SI which fell to their lowest in more than three months on Wednesday and are also bound for a second consecutive month of losses.

The most-active October rebar contract on the Shanghai Futures Exchange rose 27 yuan to close at 4,753 yuan a tonne. Despite the gain, Shanghai rebar fell 2.5 percent for all of June, more than three times its losses in May.

"It's a modest rebound, there's nothing much else to it. Actual physical trading of steel and iron ore remains thin," said a Shanghai-based trader.

BHP Billiton sold around 100,000 tonnes of 63-grade Newman iron ore fines at $174, cost and freight at a tender on Wednesday, traders said. The world's No. 3 iron ore miner also sold 80,000-90,000 tonnes of 57.7-grade Yandi fines at $152.50 a tonne, C&F, they said.

"The prices are more or less within market expectations. We believe prices will continue to fall in a slow pace because of weak Chinese demand," said an iron ore trader in Beijing.

"Besides the BHP tender, we didn't hear of any other deals for iron ore."

Global miners like BHP and Rio Tinto Thomson Reuters)