Mon Aug 15, 2011
* Shanghai rebar at 1-week top, mills may restock iron ore
* Baosteel price hike boosting steel demand outlook
By Manolo Serapio Jr
SINGAPORE, Aug 15 (Reuters) - Shanghai rebar futures rose for a fourth straight day on Monday to their highest in more than a week, spurred by expectations of firm demand in top consumer China.
Hopes that Chinese steel demand will stay strong ahead of the peak consumption season from mid-September should renew interest among mills to restock iron ore, the key steelmaking material, this week and boost prices that had dropped for most of last week.
The most-traded January rebar contract on the Shanghai Futures Exchange SRBc6 rose 0.9 percent to close at 4,854 yuan per tonne, just off its session-peak of 4,855 yuan, its highest since Aug. 5.
"Baosteel's move to increase prices was a good sign that steel demand will remain strong in September," said a trader in China's eastern Shandong province.
Baoshan Iron & Steel Co Ltd , China's biggest listed steelmaker, said on Friday it would raise prices of its main products for September, in anticipation that demand for flat steel products will pick up.
Unlike long steel products which had benefited from increased construction activity in China this year, makers of flat steel meant for automakers and producers of home appliances have seen margins squeezed by poor demand.
"There are expectations the central government may ease credit controls in the latter part of the year, which means steel mills can get more money from the banks," said a shipping manager for an iron ore trading firm in Shanghai.
"That's another reason behind the rise in steel prices, and if they continue to rise I believe steel mills would start to restock on iron ore this week."
China's monetary tightening campaign, in the form of interest rate hikes and increases in banks' reserve requirement ratio, has limited the amount of loans available to steel mills.
There was little appetite for iron ore last week as caution about the state of the global economy restrained buying.
Two key indexes, based on spot deals in China, fell for a fourth straight session on Friday to their lowest in about two weeks. The Steel Index's 62-percent benchmark .IO62-CNI=SI eased 20 cents to $175.90 a tonne and a similar index by Metal Bulletin .IO62-CNO=MB eased 7 cents to $176.23.
Global miner BHP Billiton sold 61.2-grade MAC iron ore fines at $173.93 a tonne, cost and freight, and 62.5-grade Newman fines at $180.93 a tonne, at a tender on Friday.
"I thought the prices were a bit more expensive than I had expected. But people probably feel that prices will go up again this week with steel prices rising," said the Shanghai shipping manager.
Indian ore with 63.5/63 percent iron content was offered at $183-$185 a tonne on Monday, steady from Friday, Chinese consultancy Umetal said.
Traders said there are unlikely to be fresh cargoes from Indian miners with India shut for a public holiday. ($1 = 6.389 yuan)
* Shanghai rebar at 1-week top, mills may restock iron ore
* Baosteel price hike boosting steel demand outlook
By Manolo Serapio Jr
SINGAPORE, Aug 15 (Reuters) - Shanghai rebar futures rose for a fourth straight day on Monday to their highest in more than a week, spurred by expectations of firm demand in top consumer China.
Hopes that Chinese steel demand will stay strong ahead of the peak consumption season from mid-September should renew interest among mills to restock iron ore, the key steelmaking material, this week and boost prices that had dropped for most of last week.
The most-traded January rebar contract on the Shanghai Futures Exchange SRBc6 rose 0.9 percent to close at 4,854 yuan per tonne, just off its session-peak of 4,855 yuan, its highest since Aug. 5.
"Baosteel's move to increase prices was a good sign that steel demand will remain strong in September," said a trader in China's eastern Shandong province.
Baoshan Iron & Steel Co Ltd , China's biggest listed steelmaker, said on Friday it would raise prices of its main products for September, in anticipation that demand for flat steel products will pick up.
Unlike long steel products which had benefited from increased construction activity in China this year, makers of flat steel meant for automakers and producers of home appliances have seen margins squeezed by poor demand.
"There are expectations the central government may ease credit controls in the latter part of the year, which means steel mills can get more money from the banks," said a shipping manager for an iron ore trading firm in Shanghai.
"That's another reason behind the rise in steel prices, and if they continue to rise I believe steel mills would start to restock on iron ore this week."
China's monetary tightening campaign, in the form of interest rate hikes and increases in banks' reserve requirement ratio, has limited the amount of loans available to steel mills.
There was little appetite for iron ore last week as caution about the state of the global economy restrained buying.
Two key indexes, based on spot deals in China, fell for a fourth straight session on Friday to their lowest in about two weeks. The Steel Index's 62-percent benchmark .IO62-CNI=SI eased 20 cents to $175.90 a tonne and a similar index by Metal Bulletin .IO62-CNO=MB eased 7 cents to $176.23.
Global miner BHP Billiton sold 61.2-grade MAC iron ore fines at $173.93 a tonne, cost and freight, and 62.5-grade Newman fines at $180.93 a tonne, at a tender on Friday.
"I thought the prices were a bit more expensive than I had expected. But people probably feel that prices will go up again this week with steel prices rising," said the Shanghai shipping manager.
Indian ore with 63.5/63 percent iron content was offered at $183-$185 a tonne on Monday, steady from Friday, Chinese consultancy Umetal said.
Traders said there are unlikely to be fresh cargoes from Indian miners with India shut for a public holiday. ($1 = 6.389 yuan)
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