Saturday, 18 Feb 2012
Bloomberg reported that iron ore dropped for a seventh day, the longest losing run in more than three months, as the biggest consumer China may slow buying because of increased stockpiles.
Data from The Steel Index showed that ore with 62% iron content at the Chinese port of Tianjin fell 1.6% to USD 137.40 per metric tonne on February 17th 2012. Prices last had a losing run that long in the period ended Oct. 28.
Mr Daniel Hynes director of commodity research at Citigroup Inc in Sydney said that “They’re certainly not as aggressive as we’ve come to expect at this time of year.”
He said that a price rally late last year may have been down to re stocking.
According to data from Mysteel.com, inventories at 30 Chinese ports totaled 100.21 million tonnes last week, about 32% more than a year earlier. Steel demand in China normally increases after the weeklong Lunar New Year holidays as construction resumes. The break ended on January 29 this year.
(Sourced from Bloomberg)
Showing posts with label Chinese iron ore market. Show all posts
Showing posts with label Chinese iron ore market. Show all posts
Saturday, February 18, 2012
Friday, February 10, 2012
Iron ore stocks at Chinese ports approaching alarm line
Friday, 10 Feb 2012
Mr Zhang Chunliang scheduler from Dalian Port Ore Terminal Company Limitev said that iron ore piled at docks in Dalian Port can be seen everywhere, most of which are shipped from Brazil and Australia. Although current capacities are approaching the alarm level, more ships are on the way.
Mr Zhang said that mills and traders usually take cargos away soon after unloading. Impacted by gloomy downstream demand since last year, there is an obvious slowdown in taking deliveries. They had loading and unloading of around 2.5 million tonnes in January 2011 but the figure has now fallen to 1.6 million tonnes in this January.
He said that this is not the only case many other ports in China are also facing full yards. Period of storage of some cargos even exceed half a year, versus the normal three months.
Up to February 3rd 2012, iron ore inventory at 36 Chinese ports totaled around 99.15 million tonnes. Most traders say demand for spot port will improve this week but are only cautiously optimistic over the question if prices will step up adding mills are seeing deficit, downstream steel consuming industries are slowing down and large rises will be confined by sizable port inventories.
(Source: www.steelhome.cn/en)
Mr Zhang Chunliang scheduler from Dalian Port Ore Terminal Company Limitev said that iron ore piled at docks in Dalian Port can be seen everywhere, most of which are shipped from Brazil and Australia. Although current capacities are approaching the alarm level, more ships are on the way.
Mr Zhang said that mills and traders usually take cargos away soon after unloading. Impacted by gloomy downstream demand since last year, there is an obvious slowdown in taking deliveries. They had loading and unloading of around 2.5 million tonnes in January 2011 but the figure has now fallen to 1.6 million tonnes in this January.
He said that this is not the only case many other ports in China are also facing full yards. Period of storage of some cargos even exceed half a year, versus the normal three months.
Up to February 3rd 2012, iron ore inventory at 36 Chinese ports totaled around 99.15 million tonnes. Most traders say demand for spot port will improve this week but are only cautiously optimistic over the question if prices will step up adding mills are seeing deficit, downstream steel consuming industries are slowing down and large rises will be confined by sizable port inventories.
(Source: www.steelhome.cn/en)
Tuesday, February 7, 2012
Iron Ore-Spot seen ticking higher, China steel eyed
Tuesday, 07 February 2012
Iron ore may extend modest gains this week as more Chinese steel producers return to the spot market to stock up, but a sluggish domestic steel market is likely to cap any gains in price.Chinese steel prices have been largely steady so far this year with activity in the domestic construction sector, a heavy steel user, yet to fully resume.
"Construction activity is still low because it's still winter in the northern part of China and we only expect steel demand to return later this month or in March," said a Shanghai-based iron ore trader.Mirae Asset Securities said it was keeping its "underweight" stance on China's steel sector this year, particularly the large state-owned steel mills."The structural driver of steel demand - urbanization - remains a valid long-term call, but it may halt in 2012 if the central government continues its crackdown on house prices," the brokerage said in a note.
China's slack steel demand meant a slow start for iron ore this year, which gained a modest 3.5 percent versus a more than 12 percent rise for copper, another key construction material.The most-traded May rebar contract on the Shanghai Futures Exchange has risen 3 percent so far this year, closing nearly flat at 4,330 yuan ($690) a tonne on Monday.Iron ore with 62 percent iron content rose 0.1 percent to $143.30 a tonne on Friday, according to the Steel Index, its highest level since Nov. 22.
"Iron ore prices could rise further this week with some more mills going back to the market and traders taking positions," said the Shanghai trader.Offer prices for Australian ore in China rose by at least a dollar on Monday, with 61.5-grade Pilbara iron ore fines quoted at $142-$144 a tonne, cost and freight, and 58-grade Yandi fines at $130-$132, said industry consultancy Umetal. Indian 63.5/63-grade fines were offered at $148-$151 a tonne, up $2 from Friday, said Umetal.
Traders are eyeing another tender by global miner BHP Billiton due to close later on Monday, particularly with prices moving higher at recent tenders.BHP last sold Yandi fines at $130.5 a tonne, C&F on Friday, up from $130 on Thursday, traders said.But a sizeable amount of iron ore at Chinese ports, which is readily available and which buyers can buy in smaller tonnages unlike fresh spot cargoes, may limit appetite for more imports, traders said.
Stockpiles of imported iron ore at major Chinese ports reached 101.49 million tonnes last week, with shipments from the three biggest exporters -- Australia, Brazil and India -- rising, Chinese consultancy Mysteel said on Friday. (sourced Reuters)
Iron ore may extend modest gains this week as more Chinese steel producers return to the spot market to stock up, but a sluggish domestic steel market is likely to cap any gains in price.Chinese steel prices have been largely steady so far this year with activity in the domestic construction sector, a heavy steel user, yet to fully resume.
"Construction activity is still low because it's still winter in the northern part of China and we only expect steel demand to return later this month or in March," said a Shanghai-based iron ore trader.Mirae Asset Securities said it was keeping its "underweight" stance on China's steel sector this year, particularly the large state-owned steel mills."The structural driver of steel demand - urbanization - remains a valid long-term call, but it may halt in 2012 if the central government continues its crackdown on house prices," the brokerage said in a note.
China's slack steel demand meant a slow start for iron ore this year, which gained a modest 3.5 percent versus a more than 12 percent rise for copper, another key construction material.The most-traded May rebar contract on the Shanghai Futures Exchange has risen 3 percent so far this year, closing nearly flat at 4,330 yuan ($690) a tonne on Monday.Iron ore with 62 percent iron content rose 0.1 percent to $143.30 a tonne on Friday, according to the Steel Index, its highest level since Nov. 22.
"Iron ore prices could rise further this week with some more mills going back to the market and traders taking positions," said the Shanghai trader.Offer prices for Australian ore in China rose by at least a dollar on Monday, with 61.5-grade Pilbara iron ore fines quoted at $142-$144 a tonne, cost and freight, and 58-grade Yandi fines at $130-$132, said industry consultancy Umetal. Indian 63.5/63-grade fines were offered at $148-$151 a tonne, up $2 from Friday, said Umetal.
Traders are eyeing another tender by global miner BHP Billiton due to close later on Monday, particularly with prices moving higher at recent tenders.BHP last sold Yandi fines at $130.5 a tonne, C&F on Friday, up from $130 on Thursday, traders said.But a sizeable amount of iron ore at Chinese ports, which is readily available and which buyers can buy in smaller tonnages unlike fresh spot cargoes, may limit appetite for more imports, traders said.
Stockpiles of imported iron ore at major Chinese ports reached 101.49 million tonnes last week, with shipments from the three biggest exporters -- Australia, Brazil and India -- rising, Chinese consultancy Mysteel said on Friday. (sourced Reuters)
Thursday, January 12, 2012
Chinese iron ore imports in Dec up by 10pct YoY
Thursday, 12 Jan 2012
China Knowledge quoted according to latest statistics released by the General Administration of Customs China, the world largest iron ore importer and steel maker saw its iron ore import rise 10.3%YoY to 64.09 million tons in December last year.
The iron ore import last month reflected a 0.2% decline from November.
In the whole of 2011, the country iron ore import amounted to 690 million tonnes up by 10.9%YoY.
The average import price of iron ore surged 27.1%YoY to USD 163.8 per tonne last year.
The country exports 48.88 million tonnes of steel products in 2011 up by 14.9% YoY and saw its imports of steel products fall 5.2% to 15.58 million tonnes in the corresponding year.
(Sourced from China Knowledge)
China Knowledge quoted according to latest statistics released by the General Administration of Customs China, the world largest iron ore importer and steel maker saw its iron ore import rise 10.3%YoY to 64.09 million tons in December last year.
The iron ore import last month reflected a 0.2% decline from November.
In the whole of 2011, the country iron ore import amounted to 690 million tonnes up by 10.9%YoY.
The average import price of iron ore surged 27.1%YoY to USD 163.8 per tonne last year.
The country exports 48.88 million tonnes of steel products in 2011 up by 14.9% YoY and saw its imports of steel products fall 5.2% to 15.58 million tonnes in the corresponding year.
(Sourced from China Knowledge)
Thursday, December 29, 2011
Ore sales to China poised to rise - Report
Thursday, 29 Dec 2011
According to researcher Umetal.com, iron ore prices could rise to USD 150 a tonne by March on expectations China central bank will ease credit conditions after the Chinese New Year.
Mr Xu Guangjian Beijing-based Umetal.com analyst said the steelmaking raw material may trade between USD 130 and USD 160 a tonne next year.
He said that "Ore prices may rise moderately after the holidays. Still, there are no signs steel demand will have a substantial recovery in other sectors such as automobiles and home appliances."
Mr Xu said iron ore may remain below USD 140 before the Chinese New Year as the country's steelmakers the world biggest consumers limit purchases.
The week-long Chinese new year holidays start on January 23. Workers usually return to work after the Lantern Festival, the 15th day of the New Year.
Passenger car sales in China rose 0.3 per cent in the past month, the slowest pace in six months, according to the China Association of Automobile Manufacturers.
According to Umetal China construction industry accounts for about 53% of the nation steel demand, while cars make up 7%.
Crude-steel output in China, the world's biggest producer, fell to 49.9 million tonnes in November, the lowest level in 14 months as a slower economy eroded demand and cut prices.
(Sourced from The Australian)
According to researcher Umetal.com, iron ore prices could rise to USD 150 a tonne by March on expectations China central bank will ease credit conditions after the Chinese New Year.
Mr Xu Guangjian Beijing-based Umetal.com analyst said the steelmaking raw material may trade between USD 130 and USD 160 a tonne next year.
He said that "Ore prices may rise moderately after the holidays. Still, there are no signs steel demand will have a substantial recovery in other sectors such as automobiles and home appliances."
Mr Xu said iron ore may remain below USD 140 before the Chinese New Year as the country's steelmakers the world biggest consumers limit purchases.
The week-long Chinese new year holidays start on January 23. Workers usually return to work after the Lantern Festival, the 15th day of the New Year.
Passenger car sales in China rose 0.3 per cent in the past month, the slowest pace in six months, according to the China Association of Automobile Manufacturers.
According to Umetal China construction industry accounts for about 53% of the nation steel demand, while cars make up 7%.
Crude-steel output in China, the world's biggest producer, fell to 49.9 million tonnes in November, the lowest level in 14 months as a slower economy eroded demand and cut prices.
(Sourced from The Australian)
Wednesday, December 21, 2011
Iron ore prices drop in China amid falling investments
Wednesday, 21 Dec 2011
Xinhua reported that sharply decreasing fixed asset investment in the railways and increased housing inventory in the property market are cutting demand for steel, resulting in falling prices of imported iron ore in the world's second largest economy.
According to the Xinhua-China Iron Ore Price Index that was released that inventories of iron ore at 25 of China's major sea ports dropped 1.6% to 97.99 million tonnes in the week ending on Dec 19 from the previous week.
According to the index, which is compiled by the Xinhua News Agency to track iron ore inventories and imports in Chinese spot markets Last week's imported iron ore stock was 1.61 million metric tons less than that of one week earlier.
The price index for 63.5% purity iron ore imports fell 4.1% to hit 139 points while that for 58% purity iron ore imports decreased by 1.7% WoW to rest at 117 points.
Analysts said the declining prices of iron ore are a result of a sluggish steel market amid falling investment in the nation railway projects and increased housing inventory in the property sector.
According to data from the Ministry of Railways, fixed asset investment in railways in the first 11 months of the year plunged 28.4%YoY to CNY 492 billion. The decline rate widened by 3.2 percentage points compared to that in the first ten months.
In November, more major cities saw drops in new home prices from October as housing sales slipped 1.2%YoY with major developers such as China Vanke experiencing a 20% sales decrease last month.
Analysts predicted a further downward trend for the iron ore prices in the coming week as steel companies are becoming cautious in purchases amid expectations that downstream businesses will cut demand for steel.
(Sourced from Xinhua)
Xinhua reported that sharply decreasing fixed asset investment in the railways and increased housing inventory in the property market are cutting demand for steel, resulting in falling prices of imported iron ore in the world's second largest economy.
According to the Xinhua-China Iron Ore Price Index that was released that inventories of iron ore at 25 of China's major sea ports dropped 1.6% to 97.99 million tonnes in the week ending on Dec 19 from the previous week.
According to the index, which is compiled by the Xinhua News Agency to track iron ore inventories and imports in Chinese spot markets Last week's imported iron ore stock was 1.61 million metric tons less than that of one week earlier.
The price index for 63.5% purity iron ore imports fell 4.1% to hit 139 points while that for 58% purity iron ore imports decreased by 1.7% WoW to rest at 117 points.
Analysts said the declining prices of iron ore are a result of a sluggish steel market amid falling investment in the nation railway projects and increased housing inventory in the property sector.
According to data from the Ministry of Railways, fixed asset investment in railways in the first 11 months of the year plunged 28.4%YoY to CNY 492 billion. The decline rate widened by 3.2 percentage points compared to that in the first ten months.
In November, more major cities saw drops in new home prices from October as housing sales slipped 1.2%YoY with major developers such as China Vanke experiencing a 20% sales decrease last month.
Analysts predicted a further downward trend for the iron ore prices in the coming week as steel companies are becoming cautious in purchases amid expectations that downstream businesses will cut demand for steel.
(Sourced from Xinhua)
Thursday, December 15, 2011
Iron ore inventories dip in China
Thursday, 15 Dec 2011
Xinhua quoted according to the Xinhua-China Iron Ore Price Index released on Tuesday that inventories of iron ore at 25 major Chinese ports dipped 0.75% WoW to 99.6 million tons in the week ending on December 12.
According to the index it was the first time in a month for iron ore supplies to fall below 100 million tonnes with last week inventories down by 750,000 tonnes. The price index for 63.5% grade imported iron ore dropped 1.36% to 145 points in the week while 58% purity iron ore imports remained unchanged at 119 points.
According to Xinhua analysts a decline in crude steel output dampened buying enthusiasm among most steel manufacturers and iron ore traders, who are still waiting to make a move in light of possible price fluctuations in the future.
According to customs data, China steel exports stood at 45.16 million tonnes between January and November up by 13.8%YoY while steel imports fell 4.2%YoY to 14.39 million tonnes.
Currently, China domestic iron ore is cheaper than imports, putting Chinese steelmakers in a position to limit their purchases of raw materials particularly from overseas.
(Sourced from Xinhua)
Xinhua quoted according to the Xinhua-China Iron Ore Price Index released on Tuesday that inventories of iron ore at 25 major Chinese ports dipped 0.75% WoW to 99.6 million tons in the week ending on December 12.
According to the index it was the first time in a month for iron ore supplies to fall below 100 million tonnes with last week inventories down by 750,000 tonnes. The price index for 63.5% grade imported iron ore dropped 1.36% to 145 points in the week while 58% purity iron ore imports remained unchanged at 119 points.
According to Xinhua analysts a decline in crude steel output dampened buying enthusiasm among most steel manufacturers and iron ore traders, who are still waiting to make a move in light of possible price fluctuations in the future.
According to customs data, China steel exports stood at 45.16 million tonnes between January and November up by 13.8%YoY while steel imports fell 4.2%YoY to 14.39 million tonnes.
Currently, China domestic iron ore is cheaper than imports, putting Chinese steelmakers in a position to limit their purchases of raw materials particularly from overseas.
(Sourced from Xinhua)
Friday, December 9, 2011
Iron ore price negotiations - Who will blink first - Vale or China
Friday, 09 Dec 2011
FE reported that Vale SA’s scare as one of its new gigantic iron ore ships cracked two ballast tanks is a mere sideshow to the bigger battle between the world’s largest producer of the ore and China, the biggest buyer. At stake is who gets to hold the whip hand in the 1 billion tonne a year seaborne iron ore market, and neither side is going to want to blink first.
Neither the Brazilian company or the Chinese may have to give in first, as there are reasons to think that a compromise may be the best way to resolve the dispute.
The heart of the problem lies in Vale’s plan to build 35 mega-bulk carriers with a capacity of around 4,00,000 tonne each, or about double the average size of existing Capesize vessels that haul the world’s iron ore.
Vale’s reasoning is simple enough, it will allow them to cut freight costs and better compete with BHP Billiton and Rio Tinto, whose mines in Western Australia are substantially closer to China than those in Brazil, whose ore has to cross two oceans and go around the Cape of Good Hope. Using the massive vessels, six of which are already sailing will reduce freight costs and could cut the USD 14 per tonne freight charge from Brazil to China in half.
If Vale owns the ships, it will get the saving, and USD 7 a tonne on the around 140 million tonne a year Vale sells to China represents a gain of as much as USD 980 million. The entry of the ultra-large ore carriers will also depress freight rates for Capesize vessels, meaning Vale will also benefit from lower charges on the 180 million tonne of output that it sells to customers other than China. And it’s here where the Chinese objections to Vale’s shipping plans come to the fore.
China’s state owned Cosco Group will suffer if Vale’s giant vessels depress freight rates further. COSCO will also lose volumes to the Vale ships, so it’s a double whammy. And Chinese steelmarkers fear that if Vale controls both the mines and the ships it will lessen their ability to bargain for better prices.
The steelmakers also worry they won’t share in the benefit of falling freight rates, with the extra cash accruing to the miners, who have already gained from changing to short-term contracts . So it comes as no surprise that Vale’s ships have so far been blocked from docking at Chinese ports, on the grounds that facilities aren’t yet ready for them and questions as to how they would be guided to the docks.
But it may also be that the Chinese are upping the ante with Vale, effectively saying that they aren’t going to allow the ships in until the Brazilian company makes some concessions.
These could include leasing out or selling the massive ore carriers, or agreeing to some price reductions to steelmakers so the benefits of cheaper freight costs are shared.
Vale maintains it doesn’t want the new vessels in order to make money from the volatile shipping business, rather it wants to improve its own competitiveness against the Australians. That may well be the case, but then Vale should be willing to compromise in order to lock in some profits.
The longer the matter remains unresolved, the more likely it becomes that the winners will be BHP and Rio. China’s imports of iron ore rose 10.9% in the year to October over the same period last year, with Brazil’s share gaining 13.3% while Australia’s rose by 9.2%.
(Sourced from FE)
FE reported that Vale SA’s scare as one of its new gigantic iron ore ships cracked two ballast tanks is a mere sideshow to the bigger battle between the world’s largest producer of the ore and China, the biggest buyer. At stake is who gets to hold the whip hand in the 1 billion tonne a year seaborne iron ore market, and neither side is going to want to blink first.
Neither the Brazilian company or the Chinese may have to give in first, as there are reasons to think that a compromise may be the best way to resolve the dispute.
The heart of the problem lies in Vale’s plan to build 35 mega-bulk carriers with a capacity of around 4,00,000 tonne each, or about double the average size of existing Capesize vessels that haul the world’s iron ore.
Vale’s reasoning is simple enough, it will allow them to cut freight costs and better compete with BHP Billiton and Rio Tinto, whose mines in Western Australia are substantially closer to China than those in Brazil, whose ore has to cross two oceans and go around the Cape of Good Hope. Using the massive vessels, six of which are already sailing will reduce freight costs and could cut the USD 14 per tonne freight charge from Brazil to China in half.
If Vale owns the ships, it will get the saving, and USD 7 a tonne on the around 140 million tonne a year Vale sells to China represents a gain of as much as USD 980 million. The entry of the ultra-large ore carriers will also depress freight rates for Capesize vessels, meaning Vale will also benefit from lower charges on the 180 million tonne of output that it sells to customers other than China. And it’s here where the Chinese objections to Vale’s shipping plans come to the fore.
China’s state owned Cosco Group will suffer if Vale’s giant vessels depress freight rates further. COSCO will also lose volumes to the Vale ships, so it’s a double whammy. And Chinese steelmarkers fear that if Vale controls both the mines and the ships it will lessen their ability to bargain for better prices.
The steelmakers also worry they won’t share in the benefit of falling freight rates, with the extra cash accruing to the miners, who have already gained from changing to short-term contracts . So it comes as no surprise that Vale’s ships have so far been blocked from docking at Chinese ports, on the grounds that facilities aren’t yet ready for them and questions as to how they would be guided to the docks.
But it may also be that the Chinese are upping the ante with Vale, effectively saying that they aren’t going to allow the ships in until the Brazilian company makes some concessions.
These could include leasing out or selling the massive ore carriers, or agreeing to some price reductions to steelmakers so the benefits of cheaper freight costs are shared.
Vale maintains it doesn’t want the new vessels in order to make money from the volatile shipping business, rather it wants to improve its own competitiveness against the Australians. That may well be the case, but then Vale should be willing to compromise in order to lock in some profits.
The longer the matter remains unresolved, the more likely it becomes that the winners will be BHP and Rio. China’s imports of iron ore rose 10.9% in the year to October over the same period last year, with Brazil’s share gaining 13.3% while Australia’s rose by 9.2%.
(Sourced from FE)
Iron ore price offers steady but no impact from Vale ship incident
Friday, 09 Dec 2011
Iron ore price offers in top market China steadied on Tuesday as leaner steel demand curbed buying interest in the raw material, with Shanghai steel futures edging lower.
Traders said while a disabled mega vessel of top miner Vale in a Brazilian port has the potential to affect supplies if the problem is not resolved soon, it was too early to influence spot trading in iron ore.
Shipping agents and the ship's operator said that world's largest iron-ore vessel is disabled and could sink in a port where Vale, the world top producer, loads about 10 percent of global supplies of the commodity.
An iron ore trader in Singapore said that "It's not going to affect the (iron ore) market in the very short term but it has the potential to. It depends on how long it's going to take them for it to get off the berth.”
(Sourced from Reuters)
Iron ore price offers in top market China steadied on Tuesday as leaner steel demand curbed buying interest in the raw material, with Shanghai steel futures edging lower.
Traders said while a disabled mega vessel of top miner Vale in a Brazilian port has the potential to affect supplies if the problem is not resolved soon, it was too early to influence spot trading in iron ore.
Shipping agents and the ship's operator said that world's largest iron-ore vessel is disabled and could sink in a port where Vale, the world top producer, loads about 10 percent of global supplies of the commodity.
An iron ore trader in Singapore said that "It's not going to affect the (iron ore) market in the very short term but it has the potential to. It depends on how long it's going to take them for it to get off the berth.”
(Sourced from Reuters)
Thursday, November 17, 2011
Bank of China eying iron ore swaps - Report
Thursday, 17 Nov 2011
Reuters, citing two sources familiar with the matter, reported that a unit of the Bank of China, one of the country's top four banks, is planning to kick off an iron ore swaps business next year in a bid to tap growing demand for hedging from steel mills and traders.
BOC International, the investment banking arm of the state owned bank, aims to provide brokerage services, proprietary trading of iron ore swaps as well as physical trading.
As per report “The bank plans to start an iron ore swaps business in the first half of next year, with the aim of providing hedging services for domestic players first. It also plans to apply for clearing membership in the Singapore Exchange SGX next year.”
The source said that BOC International has also applied for category two membership on the London Metal Exchange, which would give it access to all types of LME business except ring trading.
BOCI was approved as a clearing member of CME Group in March. The CME and SGX both offer clearing of iron ore swaps, with the bulk of globally traded volumes cleared on the SGX.
The entry of a major bank from the world's top iron ore buyer could bolster liquidity of the nascent swaps market, and signal a further warming to derivatives in China's state dominated steel sector as prices of the main raw material become more volatile.
Launched in May 2008, iron ore swaps are cash settled contracts that allow steelmakers and traders to hedge price risks. The volume of globally traded swaps soared to an all-time high above 9 million tonnes in October, with Singapore Exchange clearing a record 7.5 million tonnes, as prices gyrated wildly.
(Sourced from Reuters)
Reuters, citing two sources familiar with the matter, reported that a unit of the Bank of China, one of the country's top four banks, is planning to kick off an iron ore swaps business next year in a bid to tap growing demand for hedging from steel mills and traders.
BOC International, the investment banking arm of the state owned bank, aims to provide brokerage services, proprietary trading of iron ore swaps as well as physical trading.
As per report “The bank plans to start an iron ore swaps business in the first half of next year, with the aim of providing hedging services for domestic players first. It also plans to apply for clearing membership in the Singapore Exchange SGX next year.”
The source said that BOC International has also applied for category two membership on the London Metal Exchange, which would give it access to all types of LME business except ring trading.
BOCI was approved as a clearing member of CME Group in March. The CME and SGX both offer clearing of iron ore swaps, with the bulk of globally traded volumes cleared on the SGX.
The entry of a major bank from the world's top iron ore buyer could bolster liquidity of the nascent swaps market, and signal a further warming to derivatives in China's state dominated steel sector as prices of the main raw material become more volatile.
Launched in May 2008, iron ore swaps are cash settled contracts that allow steelmakers and traders to hedge price risks. The volume of globally traded swaps soared to an all-time high above 9 million tonnes in October, with Singapore Exchange clearing a record 7.5 million tonnes, as prices gyrated wildly.
(Sourced from Reuters)
Tuesday, November 15, 2011
Iron ore seen extending advance on Chinese steelmaker demand
Tuesday, 15 Nov 2011
Bloomberg cited Mr Michael Heffernan a client adviser with Austock Securities Ltd as saying that iron ore may extend its increase this month as steelmakers in China, the world’s biggest consumer, return to the market.
He said that “The current recovery is a reaction to the decline last month. It comes down to sentiment. You can detect a more positive air in the market than there was earlier this year.”
Mr James Glenn commodities analyst with National Australia Bank Ltd in Melbourne said “There was probably a bit of an over-correction last month, so the market has responded. Buyers had been sitting back and now they’re seeing an opportunity to take advantage of the lower price.”
He said that Rates may hover from USD 130 to USD 140 a tonne for the rest of the year. Iron ore for immediate delivery at Tianjin port gained USD 2.90 or 2.2% to USD 137.70 on November 11.
Steel-product exports from China climbed 11% to 41 million tonnes in the first 10 months, while iron ore imports gained 11% to 557.9 million tonnes.
(Sourced from Bloomberg)
Bloomberg cited Mr Michael Heffernan a client adviser with Austock Securities Ltd as saying that iron ore may extend its increase this month as steelmakers in China, the world’s biggest consumer, return to the market.
He said that “The current recovery is a reaction to the decline last month. It comes down to sentiment. You can detect a more positive air in the market than there was earlier this year.”
Mr James Glenn commodities analyst with National Australia Bank Ltd in Melbourne said “There was probably a bit of an over-correction last month, so the market has responded. Buyers had been sitting back and now they’re seeing an opportunity to take advantage of the lower price.”
He said that Rates may hover from USD 130 to USD 140 a tonne for the rest of the year. Iron ore for immediate delivery at Tianjin port gained USD 2.90 or 2.2% to USD 137.70 on November 11.
Steel-product exports from China climbed 11% to 41 million tonnes in the first 10 months, while iron ore imports gained 11% to 557.9 million tonnes.
(Sourced from Bloomberg)
Friday, November 11, 2011
Imported iron ore stocks continue to rise in Chinese ports
Friday, 11 Nov 2011
According to Xinhua latest iron ore price report stockpiles at 25 major ports in China rose 0.69%WoW to 98.43 million tonnes in the week ending November 7.
The price index for 63.5% grade iron ore imports rebounded 2.3% to 131 points in the week after tumbling 13.5% the previous week. The index for 58% grade imports bounced 2.97% to 104 in the week. It lost 7.3% in the previous week.
Xinhua analysts said in the latest iron ore report that a wait andsee approach was prevalent among Chinese steel manufacturers and iron ore traders whose purchasing prices were much higher than the current price on the spot market.
Imported iron ore prices dropped nearly 30% in China in October hitting the lowest level this year amid weaker demand due to the government tightening measures. Seeking new pricing models, the China Iron and Steel Association is now in talks with major international iron ore suppliers Rio Tinto, BHP and Vale.
The report said before Chinese steelmakers reach new agreements with the mining giants on pricing, trading of iron ore will remain weak because it is unlikely for them to significantly increase their buying. It added that current inventory levels can last for one to two months for Chinese steelmakers.
(sourced from Xinhua)
According to Xinhua latest iron ore price report stockpiles at 25 major ports in China rose 0.69%WoW to 98.43 million tonnes in the week ending November 7.
The price index for 63.5% grade iron ore imports rebounded 2.3% to 131 points in the week after tumbling 13.5% the previous week. The index for 58% grade imports bounced 2.97% to 104 in the week. It lost 7.3% in the previous week.
Xinhua analysts said in the latest iron ore report that a wait andsee approach was prevalent among Chinese steel manufacturers and iron ore traders whose purchasing prices were much higher than the current price on the spot market.
Imported iron ore prices dropped nearly 30% in China in October hitting the lowest level this year amid weaker demand due to the government tightening measures. Seeking new pricing models, the China Iron and Steel Association is now in talks with major international iron ore suppliers Rio Tinto, BHP and Vale.
The report said before Chinese steelmakers reach new agreements with the mining giants on pricing, trading of iron ore will remain weak because it is unlikely for them to significantly increase their buying. It added that current inventory levels can last for one to two months for Chinese steelmakers.
(sourced from Xinhua)
Wednesday, November 2, 2011
Iron ore spot prices rise on Chinese mill restocking but traders wary
Wednesday, 02 Nov 2011 | Reuters
Reuters reported that spot iron ore prices inched up for the first time in eight weeks as several steel mills in the world's top buyer China began to rebuild inventories, but slower steel demand and high ore stocks at Chinese ports are expected to cap gains.
Some traders remained concerned about the high level of stocks at Chinese ports and a flood of shipments to the Chinese coast, and a growing number of Chinese steel mills are launching overhauls to cope with slower steel demand during the winter season, which may choke off iron ore buying.
Chinese steelmakers and traders are struggling with a tighter credit as they need to repay bank loans as the year end approaches, while Beijing has no intention to ease its tightening policies in short term.
China's steel industry association said iron ore stockpiles at eight major ports had now reached as high as 98 million tonnes, with much of that bought at prices of around USD 165 per tonne.
On the other hand Morgan Stanley said that iron ore prices may fall to their lowest in more than two years amid weak demand from traders and steel mills in China. Melbourne based analysts Mr Peter Richardson and Joel Crane said in a note that “Prices may drop to as low as USD 95 a tonne in the short term.”
They said “Absent a complete implosion of steel demand, which based on leading indicators of industrial production, is not our base case expectation, the current spot iron ore price looks increasingly like a cyclical correction with an on going bullish trend.”
(sourced Bloomberg)
Reuters reported that spot iron ore prices inched up for the first time in eight weeks as several steel mills in the world's top buyer China began to rebuild inventories, but slower steel demand and high ore stocks at Chinese ports are expected to cap gains.
Some traders remained concerned about the high level of stocks at Chinese ports and a flood of shipments to the Chinese coast, and a growing number of Chinese steel mills are launching overhauls to cope with slower steel demand during the winter season, which may choke off iron ore buying.
Chinese steelmakers and traders are struggling with a tighter credit as they need to repay bank loans as the year end approaches, while Beijing has no intention to ease its tightening policies in short term.
China's steel industry association said iron ore stockpiles at eight major ports had now reached as high as 98 million tonnes, with much of that bought at prices of around USD 165 per tonne.
On the other hand Morgan Stanley said that iron ore prices may fall to their lowest in more than two years amid weak demand from traders and steel mills in China. Melbourne based analysts Mr Peter Richardson and Joel Crane said in a note that “Prices may drop to as low as USD 95 a tonne in the short term.”
They said “Absent a complete implosion of steel demand, which based on leading indicators of industrial production, is not our base case expectation, the current spot iron ore price looks increasingly like a cyclical correction with an on going bullish trend.”
(sourced Bloomberg)
Saturday, October 29, 2011
Iron ore spot stretches losses as cargoes flood market
Saturday, 29 Oct 2011
Reuters reported that iron ore price offers fell further on Thursday as slow Chinese demand and hefty spot supplies extended the losing streak of the steelmaking raw material whose value has fallen by more than 30% since September.
Chinese consultancy Umetal said sellers of Australian, Brazilian and Indian ore to top importer China cut prices by USD 5 per tonne to USD 8 a tonne from Wednesday, as miners many of whom continue to produce at full capacity and tried to clear shipments that have piled up.
A Singapore based iron ore trader said "Miners are flooding the market with cargoes and that's putting a lot of pressure on the spot market and rates are coming off."
Traders said despite the sharp fall, spot iron ore prices are still more than double miners' production cost of around USD 50 a tonne for the big producers in Australia and Brazil.
Top iron ore producer Vale said on Wednesday it expected prices to remain high for a long period of time driven by solid demand from emerging economies.
Second ranked Rio Tinto this week blamed Vale for the steep drop in iron ore prices, saying its bigger rival was diverting Europe-bound shipments to China. But Rio said it was producing at record rates.
European trader said "I think there is more space for prices to fall. There are a lot distressed cargoes around."
Traders said Indian suppliers are subject to higher costs and therefore not able to lower their offers as much as the big three producers.
An iron ore trader in Shanghai said "Bids are too low. I think the mills are not in a hurry to buy so they bid very low, hoping they can catch a bargain, adding he saw a bid for the Indian 63.5/63 grade at as low as USD 126.”
He said "Mills expect the market to dip a bit further so they want to try their luck to get some cheap deals."
China appetite for iron ore has weakened sharply because of slowing demand for steel in the country dented by uncertainty in the global economy and Beijing's monetary tightening campaign.
(Sourced from Reuters)
Reuters reported that iron ore price offers fell further on Thursday as slow Chinese demand and hefty spot supplies extended the losing streak of the steelmaking raw material whose value has fallen by more than 30% since September.
Chinese consultancy Umetal said sellers of Australian, Brazilian and Indian ore to top importer China cut prices by USD 5 per tonne to USD 8 a tonne from Wednesday, as miners many of whom continue to produce at full capacity and tried to clear shipments that have piled up.
A Singapore based iron ore trader said "Miners are flooding the market with cargoes and that's putting a lot of pressure on the spot market and rates are coming off."
Traders said despite the sharp fall, spot iron ore prices are still more than double miners' production cost of around USD 50 a tonne for the big producers in Australia and Brazil.
Top iron ore producer Vale said on Wednesday it expected prices to remain high for a long period of time driven by solid demand from emerging economies.
Second ranked Rio Tinto this week blamed Vale for the steep drop in iron ore prices, saying its bigger rival was diverting Europe-bound shipments to China. But Rio said it was producing at record rates.
European trader said "I think there is more space for prices to fall. There are a lot distressed cargoes around."
Traders said Indian suppliers are subject to higher costs and therefore not able to lower their offers as much as the big three producers.
An iron ore trader in Shanghai said "Bids are too low. I think the mills are not in a hurry to buy so they bid very low, hoping they can catch a bargain, adding he saw a bid for the Indian 63.5/63 grade at as low as USD 126.”
He said "Mills expect the market to dip a bit further so they want to try their luck to get some cheap deals."
China appetite for iron ore has weakened sharply because of slowing demand for steel in the country dented by uncertainty in the global economy and Beijing's monetary tightening campaign.
(Sourced from Reuters)
Thursday, October 27, 2011
Chinese iron ore destocking could take months - FMG
Thu, 27 Oct2011
Reuters quoted Australian miner Fortescue Metals Group said global iron ore prices down nearly 30% since early September could take months to recover as Chinese steel mills work off inventories.
Mr Nev Power Fortescue CEO told a media conference that "We are seeing some short term volatility because the steel mills are destocking in China. It has been a little more hand to mouth than what it has been."
Mr Power said “Fortescue held all its long term contracts in place and that those sales were going through. It's really the shorter term sales that are being shifted around and changed."
Mr Power when asked how long Chinese steel mills would continue to draw on existing inventories of iron ore said that "Probably a matter of weeks, maybe stretching to a couple of months."
He said weakening Chinese steel prices is contributing to reluctance by mills to immediately replenish stockpiles of iron ore.
He added that the steel prices have come down in China particularly the rebar price and that is causing some pain with the steel mills."
Mr Power said "We see continued strong growth, and that is going to be driven by the continued urbanization of central and western Chinese provinces, which are largely undeveloped and lack infrastructure at this stage."
(Sourced from Reuters)
Reuters quoted Australian miner Fortescue Metals Group said global iron ore prices down nearly 30% since early September could take months to recover as Chinese steel mills work off inventories.
Mr Nev Power Fortescue CEO told a media conference that "We are seeing some short term volatility because the steel mills are destocking in China. It has been a little more hand to mouth than what it has been."
Mr Power said “Fortescue held all its long term contracts in place and that those sales were going through. It's really the shorter term sales that are being shifted around and changed."
Mr Power when asked how long Chinese steel mills would continue to draw on existing inventories of iron ore said that "Probably a matter of weeks, maybe stretching to a couple of months."
He said weakening Chinese steel prices is contributing to reluctance by mills to immediately replenish stockpiles of iron ore.
He added that the steel prices have come down in China particularly the rebar price and that is causing some pain with the steel mills."
Mr Power said "We see continued strong growth, and that is going to be driven by the continued urbanization of central and western Chinese provinces, which are largely undeveloped and lack infrastructure at this stage."
(Sourced from Reuters)
Tuesday, October 18, 2011
Iron ore prices dip as SHFE rebar futures contract at lowest level
Tuesday, 18 Oct 2011
Reuters reported that spot iron ore prices may extend losses this week after sliding to their lowest in more than 11 months as key steel prices in top consumer China which fell to a contract low on Monday continue to restrain buying interest.
Supply of iron ore in the spot market has risen sharply with cargoes meant for long term, or three-month, contracts being sold at spot rates because Chinese mills were not keen on buying the material at contract rates that are far higher than spot.
Under supply contracts for the fourth quarter, miners are charging more than USD 175 a tonne for iron ore based on a pricing system that averages spot prices over a previous three-month period. But spot rates have fallen sharply over the past week to under USD 160 a tonne on Friday as weaker steel demand in China cut appetite for iron ore, the key raw material in making steel.
A Shanghai based iron ore trader said "It's difficult to say where the bottom is for prices. At this moment, it seems that USD 150 probably won't be the bottom for 62 (grade ore)."
The trader said "We haven't seen any change in sentiment. If the miners will continue to put all these spot cargoes in the market I believe the price will be pushed further down."
According to the Steel Index iron ore with 62% iron content fell 1.7% to USD 157.50 a tonne on Friday .IO62-CNI=SI and down 1.7% to USD 157.25 based on Platts IODBZ00-PLT. Both are the lowest levels since early November last year.
Both indexes lost more than 7% last week, their biggest weekly drop since early July 2010. Those losses could stretch this week, with steel futures in China down for a third straight session on Monday.
(Sourced from Reuters)
Reuters reported that spot iron ore prices may extend losses this week after sliding to their lowest in more than 11 months as key steel prices in top consumer China which fell to a contract low on Monday continue to restrain buying interest.
Supply of iron ore in the spot market has risen sharply with cargoes meant for long term, or three-month, contracts being sold at spot rates because Chinese mills were not keen on buying the material at contract rates that are far higher than spot.
Under supply contracts for the fourth quarter, miners are charging more than USD 175 a tonne for iron ore based on a pricing system that averages spot prices over a previous three-month period. But spot rates have fallen sharply over the past week to under USD 160 a tonne on Friday as weaker steel demand in China cut appetite for iron ore, the key raw material in making steel.
A Shanghai based iron ore trader said "It's difficult to say where the bottom is for prices. At this moment, it seems that USD 150 probably won't be the bottom for 62 (grade ore)."
The trader said "We haven't seen any change in sentiment. If the miners will continue to put all these spot cargoes in the market I believe the price will be pushed further down."
According to the Steel Index iron ore with 62% iron content fell 1.7% to USD 157.50 a tonne on Friday .IO62-CNI=SI and down 1.7% to USD 157.25 based on Platts IODBZ00-PLT. Both are the lowest levels since early November last year.
Both indexes lost more than 7% last week, their biggest weekly drop since early July 2010. Those losses could stretch this week, with steel futures in China down for a third straight session on Monday.
(Sourced from Reuters)
Saturday, October 1, 2011
Iron Ore-Shanghai rebar rises, but posts worst month ever
Oct1, 2011
* Shanghai rebar down 11 pct in Sept, off 8.7 pct in Q3
* Spot iron ore extends losses, down nearly 6 pct on month
* Slow trading ahead of week-long China holiday (Updates rebar price)
By Manolo Serapio Jr
SINGAPORE, Sept 30 (Reuters) - Shanghai steel futures rose 1 percent on Friday ahead of a week-long break in China, but posted their biggest monthly fall ever as signs of slower steel demand at home and an uncertain global economy weighed on prices.
The weakness in steel prices in China, the world's biggest consumer and producer, has spilled over to prices of raw material iron ore, which fell in September for the first time in three months.
"The credit tightening is increasingly affecting our business," said an iron ore sales official in Shanghai.
"Even state-owned steel mills are finding it more difficult to obtain enough credit from banks while they can't get cash from weak steel sales."
China has repeatedly raised interest rates and banks' reserve requirements to tame inflation that hit a three-year high of 6.5 percent in July before slowing to 6.2 percent in August.
The most-traded January rebar contract on the Shanghai Futures Exchange gained 41 yuan to close at 4,339 yuan a tonne.
On a continuing contract basis, rebar SRBc4 dropped 11 percent in September, the most ever for a month. For the third quarter, the construction steel product fell nearly 9 percent, the steepest since the second quarter of 2010.
Falling steel prices cut appetite of Chinese mills for iron ore, driving spot prices lower. The key Platts-based reference price IODBZ00-PLT slipped 0.6 percent to $170.75 a tonne on Thursday, the lowest since March 29, and down 5.7 percent for the month.
"The current level of Shanghai steel rebar futures suggest the iron ore price may ease to around $150-$160 per tonne," Commonwealth Bank of Australia said in a note.
"We think the cost support for Chinese producers is $150. If spot prices fall below this level, higher cost Chinese producers would start to lose money and may close. This should provide support for seaborne iron ore volumes and prices," it added.
Other iron ore price indexes also declined on Thursday. The Steel Index's 62-percent grade benchmark .IO62-CNI=SI dropped 0.6 percent to $171.50 a tonne and Metal Bulletin's similar gauge .IO62-CNO=MB edged down 0.2 percent to $170.18. Both are the lowest since early July.
Trading in the physical iron ore market was thin this week and is bound to slow to a halt next week with top buyer China off for the National Day holiday.
"I don't think we'll see much trading today because, if for some reason, transactions are not concluded within the day, traders will have to wait until people return to work on Oct. 10," said an iron ore trader in China's eastern Shandong province.
Prices of Singapore Exchange-cleared forward swaps <0#SGXIOS:>, which suggest where investors see spot prices going, dropped for a second day, with the nearby October contract down $2.33 at $158.17 a tonne, at least $12 cheaper than spot rates.
(sourced Reuters)
* Shanghai rebar down 11 pct in Sept, off 8.7 pct in Q3
* Spot iron ore extends losses, down nearly 6 pct on month
* Slow trading ahead of week-long China holiday (Updates rebar price)
By Manolo Serapio Jr
SINGAPORE, Sept 30 (Reuters) - Shanghai steel futures rose 1 percent on Friday ahead of a week-long break in China, but posted their biggest monthly fall ever as signs of slower steel demand at home and an uncertain global economy weighed on prices.
The weakness in steel prices in China, the world's biggest consumer and producer, has spilled over to prices of raw material iron ore, which fell in September for the first time in three months.
"The credit tightening is increasingly affecting our business," said an iron ore sales official in Shanghai.
"Even state-owned steel mills are finding it more difficult to obtain enough credit from banks while they can't get cash from weak steel sales."
China has repeatedly raised interest rates and banks' reserve requirements to tame inflation that hit a three-year high of 6.5 percent in July before slowing to 6.2 percent in August.
The most-traded January rebar contract on the Shanghai Futures Exchange gained 41 yuan to close at 4,339 yuan a tonne.
On a continuing contract basis, rebar SRBc4 dropped 11 percent in September, the most ever for a month. For the third quarter, the construction steel product fell nearly 9 percent, the steepest since the second quarter of 2010.
Falling steel prices cut appetite of Chinese mills for iron ore, driving spot prices lower. The key Platts-based reference price IODBZ00-PLT slipped 0.6 percent to $170.75 a tonne on Thursday, the lowest since March 29, and down 5.7 percent for the month.
"The current level of Shanghai steel rebar futures suggest the iron ore price may ease to around $150-$160 per tonne," Commonwealth Bank of Australia said in a note.
"We think the cost support for Chinese producers is $150. If spot prices fall below this level, higher cost Chinese producers would start to lose money and may close. This should provide support for seaborne iron ore volumes and prices," it added.
Other iron ore price indexes also declined on Thursday. The Steel Index's 62-percent grade benchmark .IO62-CNI=SI dropped 0.6 percent to $171.50 a tonne and Metal Bulletin's similar gauge .IO62-CNO=MB edged down 0.2 percent to $170.18. Both are the lowest since early July.
Trading in the physical iron ore market was thin this week and is bound to slow to a halt next week with top buyer China off for the National Day holiday.
"I don't think we'll see much trading today because, if for some reason, transactions are not concluded within the day, traders will have to wait until people return to work on Oct. 10," said an iron ore trader in China's eastern Shandong province.
Prices of Singapore Exchange-cleared forward swaps <0#SGXIOS:>, which suggest where investors see spot prices going, dropped for a second day, with the nearby October contract down $2.33 at $158.17 a tonne, at least $12 cheaper than spot rates.
(sourced Reuters)
Friday, September 2, 2011
Iron Ore-Spot prices firm on healthy outlook
Fri Sep 2, 2011
* Major indexes hit nearly four-month high
* Chinese buying interest picks up, lack of large purchases
* Shanghai rebar falls marginally, outlook healthy
SHANGHAI, Sept 2 (Reuters) - Spot iron ore prices were steady on Friday, as miners held offers firm amid an anticipated pick-up in Chinese steel demand as well as the continued tightness in supply from India, pushing up global indexes to nearly four-month highs.
The persistent shortage of iron ore exports from India's southern Karnataka state as well as the approaching peak consumption season in China have sustained the strength in iron ore offers.
"Although after 2-3 weeks the monsoon will finish in Goa, Indian supplies are likely to remain affected by high court rulings and investigations causing mine suspensions," The Steel Index .IO62-CNI=SI (TSI) said in a daily note on Friday.
Karnataka introduced a ban on exports in July 2010 which it said aimed to curb illegal mining. The Supreme Court ordered the export ban lifted in April although the southern state has yet to issue export permits.
Several tender cargoes from Australia, the world's largest iron ore exporter, were sold at firm levels, TSI added.
Chinese steel mills have been producing more than 1.9 million tonnes of crude steel per day since February, from an average 1.7 million tonnes last year, in expectation that steel demand will pick up in September and October.
"The spot market is firm this week amid growing buying interest from Chinese steel mills, but the market is still lacking active purchases in large volumes at the moment," said an iron ore trader in Shenzhen.
Global iron ore miners are likely to keep iron ore contract prices steady in the fourth quarter, with spot prices stabilising on solid Chinese demand and tight supplies, based on global indexes which are used by suppliers to fix quarterly pricing.
Platts Iron Ore Index for 62-percent grade IODBZ00-PLT surged $2 to $182.25 a tonne on Thursday, its highest since May 11.
TSI's similar gauge rose half a dollar to $180.4 a tonne, its highest since May 6, and Metal Bulletin Iron Ore Index .IO62-CNO=MB gained 49 cents to $179.98 a tonne, a level never seen since May 9.
Australian 62 percent Newman fines stood steady at $183-$185 a tonne, including freight, on Friday, and Indian 63.5/63 fines climbed to $187-$190, from $187-189, according to Chinese industry consultancy Umetal.
The most active January rebar contract on the Shanghai Futures Exchange fell marginally by 0.27 percent to 4,816 yuan ($755) per tonne on Friday.
Iron ore swaps cleared by the Singapore Exchange <0#SGXIOS:> gained for all contracts on Thursday. ($1 = 6.381 Chinese Yuan)
Wednesday, August 24, 2011
Iron Ore-Spot rises on China steel output, tight supply
Wed Aug 24, 2011
* Shanghai rebar futures rise for third day
* Low-grade Indian ore prices up on limited cargoes
By Manolo Serapio Jr
SINGAPORE, Aug 24 (Reuters) - Spot iron ore prices remained firm on Wednesday, as strong steel output in top producer China kept buying interest for the raw material intact, with tight Indian supplies lending support.
Brisk construction demand has pushed Chinese mills to produce more than 1.9 million tonnes of crude steel since late February, up from last year's daily average of around 1.7 million tonnes.
"The Chinese continue to produce steel like crazy and Indian supplies are extremely tight at the moment," said an iron ore trader in Singapore, citing factors supporting prices.
Offers for Indian grades rose by a dollar on Wednesday, with the widely traded 63.5/63 grade quoted at $187-$189 a tonne, cost and freight, said Chinese consultancy Umetal.
Monsoon rains and logistical problems have been disrupting shipments from India, the world's No. 3 iron ore supplier after Australia and Brazil.
"It's very, very difficult to get cargo from India. Goa is closed because of the monsoon season and there is also a truckers' strike in the eastern side and that is adding to logistics problems," said a Shanghai-based trader who sells Indian material to Chinese mills.
Shipments from India's southern Karnataka state have yet to resume even after the country's top court ordered a ban, in place since July 2010, lifted in April.
LOW-GRADE ORE SHINES
There is also increased interest in low-grade Indian ore given limited supplies.
"I've sold a 55/54 cargo at $134 (a tonne, cost and freight), which I think is a record price," said the Shanghai-based trader.
"Typically this grade would be around $100 but now we're seeing absolutely crazy transactions happening in the market," he said.
Global miner BHP Billiton sold Newman and Yandi iron ore fines at $183 and $159 a tonne, respectively, at a tender on Tuesday, about a dollar higher than previous deals, said the Singapore trader. Newman fines are being offered on Wednesday at $185 per tonne, he said.
"Prices are not exploding, they're creeping up, but creeping up amid a very uncertain macro environment in the developed world.
"So if we do find stability in the macro environment, I'd see spot prices increasing significantly," he said.
Iron ore prices are mostly taking their cue from firmer steel prices in China. The most-active January rebar contract on the Shanghai Futures Exchange rose 0.2 percent to 4,832 yuan a tonne on Wednesday, rising for a third-straight day.
Iron ore with 62 percent iron content rose 10 cents to $177.90 a tonne on Tuesday, its highest since Aug. 8 and marking its sixth-straight session of gains, The Steel Index .IO62-CNI=SI shows.
Metal Bulletin's similar gauge .IO62-CNO=MB rose 44 cents to $177.77 a tonne and Platts index IODBZ00-PLT gained 25 cents to $179.75.
Monday, August 22, 2011
Iron Ore-Shanghai rebar steady, firm Chinese demand
Mon Aug 22, 2011
* Shanghai rebar flat after falling 1 pct in past 2 days
* Spot iron ore prices extend gains
By Manolo Serapio Jr
SINGAPORE, Aug 22 (Reuters) - China steel futures steadied on Monday after two sessions of losses, reflecting outlook for firm demand in the world's biggest consumer which has supported prices of key steelmaking ingredient iron ore.
The most-traded January rebar contract on the Shanghai Futures Exchange was flat at 4,814 yuan per tonne by the midday break, after falling 1 percent in the past two trading days.
Strong steel demand in China's construction sector has propped up rebar prices, encouraging mills to buy more iron ore.
"Demand from cheap housing will consume part of the surplus capacity. Almost all steel mills in China are now in full operation," said an iron ore trader in China's eastern Shandong province.
Daily steel output in China, also the world's No. 1 steel producer, has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year.
Rebar prices in the physical market, currently at around 4,770 yuan per tonne, may rise to more than 5,000 yuan during the remaining months of the year, the trader said.
Iron ore purchases are likely to extend this week with China's steel output expected to stay strong. Last week, there was brisk demand for Australian cargoes amid limited Indian supplies.
"Demand for Australia's iron ore is likely to hold up as long as steel demand in China remains robust," Commonwealth Bank of Australia said in a note.
"As long as China's steel output remains robust, and iron ore supply relatively tight, we currently see a supportive environment for iron ore pricing," the bank said, noting that Chinese steel prices remained well bid in recent months.
Iron ore with 62 percent iron content rose 0.4 percent to $179.50 a tonne on Friday, based on Platts index IODBZ00-PLT, matching the Aug. 4 level.
The reference price at The Steel Index .IO62-CNI=SI gained 0.1 percent at $177.30 a tonne and Metal Bulletin's gauge .IO62-CNO=MB edged up less than 0.1 percent to $177.44.
"Inquiries have increased and I think we'll see more mills restocking this week. But I think some buyers are also being cautious given the uncertainty over the global economy," said a Singapore-based iron ore trader.
Offers for imported iron ore in China were steady on Monday, with Australian Newman 62-percent grade fines at $181-$183 a tonne, including freight, and Indian 63.5/63 grade ore at $185-$187, according to Chinese consultancy Umetal.
In the futures market, the most-traded August iron ore contract on the Singapore Mercantile Exchange was unchanged at $177.50 a tonne.
Volumes traded on SMX's iron ore futures had been thin since the bourse launched the contract on Aug. 12 with market participants opting for widely-traded swaps instead.
(sourced Reuters)
* Shanghai rebar flat after falling 1 pct in past 2 days
* Spot iron ore prices extend gains
By Manolo Serapio Jr
SINGAPORE, Aug 22 (Reuters) - China steel futures steadied on Monday after two sessions of losses, reflecting outlook for firm demand in the world's biggest consumer which has supported prices of key steelmaking ingredient iron ore.
The most-traded January rebar contract on the Shanghai Futures Exchange was flat at 4,814 yuan per tonne by the midday break, after falling 1 percent in the past two trading days.
Strong steel demand in China's construction sector has propped up rebar prices, encouraging mills to buy more iron ore.
"Demand from cheap housing will consume part of the surplus capacity. Almost all steel mills in China are now in full operation," said an iron ore trader in China's eastern Shandong province.
Daily steel output in China, also the world's No. 1 steel producer, has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year.
Rebar prices in the physical market, currently at around 4,770 yuan per tonne, may rise to more than 5,000 yuan during the remaining months of the year, the trader said.
Iron ore purchases are likely to extend this week with China's steel output expected to stay strong. Last week, there was brisk demand for Australian cargoes amid limited Indian supplies.
"Demand for Australia's iron ore is likely to hold up as long as steel demand in China remains robust," Commonwealth Bank of Australia said in a note.
"As long as China's steel output remains robust, and iron ore supply relatively tight, we currently see a supportive environment for iron ore pricing," the bank said, noting that Chinese steel prices remained well bid in recent months.
Iron ore with 62 percent iron content rose 0.4 percent to $179.50 a tonne on Friday, based on Platts index IODBZ00-PLT, matching the Aug. 4 level.
The reference price at The Steel Index .IO62-CNI=SI gained 0.1 percent at $177.30 a tonne and Metal Bulletin's gauge .IO62-CNO=MB edged up less than 0.1 percent to $177.44.
"Inquiries have increased and I think we'll see more mills restocking this week. But I think some buyers are also being cautious given the uncertainty over the global economy," said a Singapore-based iron ore trader.
Offers for imported iron ore in China were steady on Monday, with Australian Newman 62-percent grade fines at $181-$183 a tonne, including freight, and Indian 63.5/63 grade ore at $185-$187, according to Chinese consultancy Umetal.
In the futures market, the most-traded August iron ore contract on the Singapore Mercantile Exchange was unchanged at $177.50 a tonne.
Volumes traded on SMX's iron ore futures had been thin since the bourse launched the contract on Aug. 12 with market participants opting for widely-traded swaps instead.
(sourced Reuters)
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