Spot iron ore prices in China inched up on Wednesday but traders said the underlying poor health of the steel sector would continue to restrain demand. "The whole market is poor and prices still aren't ideal -- we won't be able to meet our sales target for this month," said the manager of an iron ore trading firm based in southern China.
Pilbara fines with 61.5 percent iron content were being quoted at $136-138 per tonne including cost and freight on Wednesday, inching up $1 from the previous day, according to consultancy Umetal. Iron ore with 62 percent iron content edged up 0.2 percent to $135.40 a tonne on Tuesday, according to reference price provider Steel Index.Slow steel demand in China, the world's biggest producer and consumer, has curbed the appetite for iron ore and sent the raw material's prices down more than 2 percent so far this year after falling nearly 19 percent in 2011.
"Demand ultimately depends on steel mills and they just can't accept our prices right now, and we can't go lower because our costs are too high," the trader said, adding that he didn't expect the market to recover until next month. China's move to cut banks' reserve requirement ratio for the first time this year helped Shanghai rebar futures end a seven-day slide on Monday and iron ore to snap a nine-day losing streak.
The price of Shanghai's most traded May rebar contract rose 23 yuan ($3.65) or 0.54 percent to end Wednesday at 4,251 yuan per tonne.Shanghai rebar futures and iron ore indexes at 0335 GMT