Saturday, 20 August 2011
China steel futures slipped to one-week lows on Friday, tracking losses in equities fed by fears the United States may be courting another recession and an unresolved debt
crisis in Europe, although firm demand hopes capped losses.
A drop in factory activity in the U.S. Mid-Atlantic region to the lowest level since March 2009 coupled with the debt crisis in the euro zone, dragged down Asian stocks, with South Korea's benchmark shedding 5 percent and Chinese stocks down 1.3 percent.
The most-active January rebar contract on the Shanghai Futures Exchange hit a low of 4,790 yuan per tonne on Friday, its weakest since Aug. 11. It closed down 0.3 percent at 4,814 yuan.
China's daily steel output has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year, as Chinese mills made more steel to keep up with strong demand from the construction sector.
That has supported demand for iron ore, the key ingredient to produce steel.
"The recent rout in global markets has not had any adverse impact on iron ore prices as expectations for strong demand as well as supply tightness have supported price offers," said an iron ore trader in Beijing.
Offers for India's 63.5/63 grade iron ore remained high at $188-$189 a tonne, including freight, on Friday, traders said.
Australia's No. 3 iron ore miner, Fortescue Metals Group , said tighter credit in China was moderating iron ore demand, but underlying demand remained intact.
Fortescue is one of several iron ore miners in Australia pushing up production to meet strong Asian demand for iron ore, particularly from top importer China.
Global price indexes, based on spot deals in China and which miners use as a gauge in setting contract rates, extended gains on Thursday.
Iron ore with 62-percent iron content gained 30 cents to $177.10 a tonne, according to The Steel Index .IO62-CNI=SI, and rose 24 cents to $177.29 a tonne based on Metal Bulletin's index .IO62-CNO=MB.
Platts 62-percent gauge IODBZ00-PLT edged up 25 cents to $178.75 a tonne.
Prices of iron ore swaps sustained recent gains, with nearby contracts rising for a fourth straight session on Thursday, suggesting buyers remain optimistic the strength in spot prices can continue.
In industry news, South Korea's POSCO , the world's third-biggest steelmaker, said that one of its blast furnaces in the southwestern city of Gwangyang was on fire, but no production disruptions had been reported.
"I don't expect this will affect iron ore prices as Japan and South Korea have long-term supply contracts with suppliers and are not likely to delay shipments due to this small accident," said another iron ore trader in Beijing.
Source: Reuters
China steel futures slipped to one-week lows on Friday, tracking losses in equities fed by fears the United States may be courting another recession and an unresolved debt
crisis in Europe, although firm demand hopes capped losses.
A drop in factory activity in the U.S. Mid-Atlantic region to the lowest level since March 2009 coupled with the debt crisis in the euro zone, dragged down Asian stocks, with South Korea's benchmark shedding 5 percent and Chinese stocks down 1.3 percent.
The most-active January rebar contract on the Shanghai Futures Exchange hit a low of 4,790 yuan per tonne on Friday, its weakest since Aug. 11. It closed down 0.3 percent at 4,814 yuan.
China's daily steel output has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year, as Chinese mills made more steel to keep up with strong demand from the construction sector.
That has supported demand for iron ore, the key ingredient to produce steel.
"The recent rout in global markets has not had any adverse impact on iron ore prices as expectations for strong demand as well as supply tightness have supported price offers," said an iron ore trader in Beijing.
Offers for India's 63.5/63 grade iron ore remained high at $188-$189 a tonne, including freight, on Friday, traders said.
Australia's No. 3 iron ore miner, Fortescue Metals Group , said tighter credit in China was moderating iron ore demand, but underlying demand remained intact.
Fortescue is one of several iron ore miners in Australia pushing up production to meet strong Asian demand for iron ore, particularly from top importer China.
Global price indexes, based on spot deals in China and which miners use as a gauge in setting contract rates, extended gains on Thursday.
Iron ore with 62-percent iron content gained 30 cents to $177.10 a tonne, according to The Steel Index .IO62-CNI=SI, and rose 24 cents to $177.29 a tonne based on Metal Bulletin's index .IO62-CNO=MB.
Platts 62-percent gauge IODBZ00-PLT edged up 25 cents to $178.75 a tonne.
Prices of iron ore swaps sustained recent gains, with nearby contracts rising for a fourth straight session on Thursday, suggesting buyers remain optimistic the strength in spot prices can continue.
In industry news, South Korea's POSCO , the world's third-biggest steelmaker, said that one of its blast furnaces in the southwestern city of Gwangyang was on fire, but no production disruptions had been reported.
"I don't expect this will affect iron ore prices as Japan and South Korea have long-term supply contracts with suppliers and are not likely to delay shipments due to this small accident," said another iron ore trader in Beijing.
Source: Reuters
Posts
No comments:
Post a Comment