Iron Ore-Spot prices fall, outlook bearish

MARKETS / IRON ORE
* Mysteel offers fall $2/T
* Rebar futures slide to 2-month low
* Market concerned about more falls to come
By Ruby Lian and Tom Miles

SHANGHAI, Feb 24 (Reuters) - Spot iron ore prices fell for a third straight day on Thursday amid expectations that prices are likely to drop further due to thin trade and weak steel prices.Prices of Indian ore with 63.5 percent iron content selling to China stood at $193-195 per tonne, including freight, down $2 from Wednesday, industry consultancy Mysteel said."Some traders have stopped offering today as chances for dealmaking are slim, and preferred to keep and sell stocks until prices rebound," said an iron ore trader in eastern China's Rizhao city.Chinese steel mills remained reluctant to conclude deals as they were unable to pass on surging costs to end users facing falling steel prices and weak demand this week.
"Now many mills seem happy to run these down a bit, especially because of recent falls. Until the mills need to build up stocks again, they are likely to be happy to sit and wait on the sidelines," said Christopher Ellis, an analyst with Metal Bulletin Index.
And a few iron ore traders are expecting prices to fall to $175 per tonne in coming weeks if steel prices and demand fail to recover.
STEEL UNDER PRESSURE
Steel prices extended falls on Thursday, adding to concerns that steel mills would mark time in purchasing iron ore due to concerns about profitability.
"Relatively weak steel end user demand seems to have hit sentiment somewhat and this is causing some in the market to question whether the iron ore price has fundamental support at the high levels that we have seen," Ellis said.
The bechmark rebar contract for October delivery at the Shanghai Futures Exchange closed at 4,892 yuan per tonne, down 1 percent from the previous close and also hitting the lowest in nearly two months.
Swaps cleared by the Singapore Exchange were generally lower with the March contract slumping the largest $5.83 to 168.67 per tonne, dampened by concerns over prices and demand.
Three global iron ore indexes also tumbled on Wednesday.
The Steel Index's 62 percent iron ore benchmark slumped the biggest $3.4 to $184.9 per tonne, including freight, the lowest level since Jan. 19.
Platts' 62 percent iron ore index shed 75 cents again to $186.75 per tonne, and Metal Bulletin's 62 percent index fell $1.38 to $186.56 per tonne. ($1=6.574 Yuan) (Reporting by Ruby Lian and Tom Miles; Editing by Jacqueline Wong, sourced:Thomson Reuters)

Iron Ore-Shanghai rebar, iron ore prices at record

SINGAPORE,Feb11,2011,Reuters
Shanghai steel futures rose to a record for a fifth day in a row on Friday as index-based spot iron ore prices bolted to all-time highs on tight supplies and strong demand from top buyer China.
Chinese steelmakers are boosting production in anticipation of a pickup in demand when construction activities restart in spring after halting in winter.

"People are pushing up prices because the cost of iron ore and coal are increasing and spring is approaching which means the resumption of construction activities in China," said an iron ore trader in China's eastern Shandong province.
The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange was up 0.5 percent at 5,213 yuan per tonne by the midday break, after peaking at 5,230 yuan earlier.

Most Chinese rebar exporters have stopped selling overseas and have turned to the domestic market given soaring prices at home, traders said.
Spot rebar is being sold at 4,800 yuan per tonne in northern China and at almost 5,000 yuan in the south, the Shandong trader said.
"Most steel mills are producing in full capacity which means there could be a big surplus of these steel products if demand is weak," he added.

RECORD IRON ORE
The surge in Shanghai rebar futures followed iron ore price indexes reaching record levels on Thursday.
Global miners Vale and Rio Tinto use the indexes in setting quarterly iron ore contracts, which is likely to hit a record in April-June given the recent surge in spot prices.
Vale and Rio price quarterly rates using the average index-based price for the past three months one month before the start of the relevant quarter.
Platts' 62 percent iron ore index IODBZ00-PLT has averaged $176.5 a tonne, cost and freight delivered to China, from Dec. 1 until this week, up more than 18 percent from the September-November average.
Platts' index rose $1.50 to $190.25 a tonne on Thursday, and with the bull trend intact, it could test $219 over the next three months, said Reuters market analyst Wang Tao.
The Steel Index 62 percent iron ore benchmark .IO62-CNI=SI climbed $1.60 to $188, and Metal Bulletin's 62 percent gauge .IO62-CNO=MB jumped $1.79 to $185.90.
BHP, Rio Tinto, Vale as well as Australian iron ore producer Fortescue Metals Group "are shipping as much as they can" while cargoes from No. 3 supplier India are crimped by an export ban in Karnataka and transport restrictions in Orissa, Commonwealth Bank of Australia said in a note.

India's Supreme Court is likely to rule on the Karnataka ban this month, which if lifted, could dampen the rally that has pushed up price indexes by 11 percent so far this year, after gaining more than 40 percent in 2010.
The Karnataka ban has been in place since last July, shrinking India's iron ore exports for a sixth straight month in December.
Indian ore with 63.5 percent iron content was being offered in China at $190-$192 a tonne, including freight, up from $188-$190 earlier this week, said Chinese consultancy Umetal.
That grade could hit $200 next week, said a Shanghai-based trader who saw offers of as high as $197 per tonne.

"But we may see some correction in March. Some mills are not buying because credit is getting tighter and the government is bent on controlling price increases," the Shanghai trader said.
China raised interest rates for the second time in six weeks on Tuesday to tame stubbornly high inflation that threatens to unsettle global markets.

Steel rebar futures at record high on SHFE

Tuesday, 01 Feb 2011
Shanghai steel rebar futures edged up to a new record for the second straight session on Tuesday, buoyed by higher cost of raw materials like iron ore and coking coal.
The most active rebar contract for October delivery on the Shanghai Futures Exchange was up 0.4% at CNY 5,118 per tonne at 0107 GMT, after rising to as high as CNY 5,121 per tonne.(Sourced:Reuters)

Indian Iron ore sold at $188.50/T, highest since Feb 2008

By Manolo Serapio Jr

SINGAPORE, Jan 19, 2011 (Reuters) - Key iron ore price indexes were on track to hit record highs on Wednesday, with spot prices closing in on $200 a tonne, aided by strong Chinese buying ahead of the Lunar New Year and persistent worries over tight supply.
Rising prices of steelmaking materials like iron ore as well as coking coal, after floods ravaged top producer Australia, drove Shanghai steel rebar futures to a record high for a third time in less than a week.
High-grade Indian ore was sold in the spot market this week at $188.50 a tonne, including freight, a level not seen since spot prices hit a record around $200 in February 2008.
Indian ore with 63.5 percent iron content was being quoted at $192 a tonne on Wednesday, said an Indian trader in Orissa.
"The way buyers are buying, the price will touch $200 although exporters in India are becoming cautious on how long the prices can be sustained," he said.
With global steel demand shaky, iron ore spot prices which have rallied since the year started, could be prone to a correction soon with some buyers from No. 1 importer China turning cautious as prices approach record highs, traders said.
"There's underlying fear that iron ore prices are going up a bit too fast," said a physical iron ore and steel trader in Singapore.
"I don't see end-users jumping to buy steel so I don't know how these prices can be sustained," he said, adding traders are dominating iron ore purchases instead of steelmakers, suggesting the rally is driven by speculative activity instead of real demand.
The outlook for the global steel sector is stable with the worst behind the industry after the economic downturn, although recovery is still relatively slow and not expected to accelerate, Standard & Poor's lead analyst Andrey Nikolaev said on Tuesday.
The most active rebar futures in the Shanghai Futures Exchange rose to a contract peak of 4,941 yuan per tonne on Wednesday, as raw material prices climbed. It closed at 4,931 yuan, up 0.4 percent.

Key indexes near record high

19th January 2011
SINGAPORE – Key iron-ore price indexes were on track to hit record highs on Wednesday, aided by strong Chinese buying ahead of the Lunar New Year and persistent worries over tight supply.
Some Chinese steel mills continued to restock the steelmaking material for fear prices would go up further while some traders were adopting a more cautious stance with prices at near record highs, traders said.
The Platts 62% iron-ore index rose 1,4% to $185 a ton, cost and freight delivered to China, on Tuesday.
That is just a dollar away from the $186 posted on Platts on April 20 last year, the highest since the reference price provider began publishing daily iron ore prices in June 2008.
The Steel Index's (TSI) 62% benchmark edged up 60c to $181,40 a ton, also near its record $184,80 reached last April 23.
High-grade Carajas iron ore fines from top producer Vale were offered at above $200 a ton on Tuesday, TSI said in a note.
Rising prices of steelmaking materials like iron ore as well as coking coal, after floods ravaged top producer Australia, kept Shanghai steel rebar futures trading near record highs.
The most active May rebar contract on the Shanghai Futures Exchange touched a high of 4 931 yuan a ton on Wednesday, a tad off the record 4 933 yuan touched on Monday.
The outlook for the global steel sector is stable with the worst behind the industry after the economic downturn, although recovery is still relatively slow and not expected to accelerate, Standard & Poor's lead analyst Andrey Nikolaev said on Tuesday.
Edited by: Reuters

Iron-ore-prices hit new eight month top as rebar futures firm

By: Reuters, 10th January 2011
SINGAPORE - Shanghai rebar futures rose to two-month peaks on Monday, showing that iron-ore prices have room to keep recent gains as firm Chinese demand lifted key indexes to their highest since May.
Chinese steel mills, the biggest buyers of the world's iron ore, have been replenishing stocks of the steelmaking raw material ahead of the Lunar New Year in February, with stronger steel prices also supporting the buying binge.
"Steel prices are increasing because traders are boosting their stocks of steel products and raw material costs, like coal, are rising," said an iron-ore trader in Rizhao in China's eastern Shandong province.
Steelmakers across Asia have been raising product prices to meet a projected increase in coking coal prices to around $300/t, the highest in two years, as supply from top exporter Australia had been disrupted by massive floods.
The most active May rebar contract on the Shanghai Futures Exchange hit a high of 4 851 yuan a ton in morning trade, a level last seen on November 11.
Firmer steel prices supported iron ore despite concerns that the coking coal shortage would impact iron-ore demand.
"The marginal buyers in the spot iron-ore market tend to be small Chinese mills, which are not exposed to the Queensland situation for their coal supply and whose domestic coal price has seen limited movement," Macquarie said in a note.
"With steel prices and production levels continuing to rise in China, these mills have capacity to pay more for iron-ore in the short term, and thus there is a strong chance the spot price could continue pushing upward until Chinese New Year."
Chinese iron-ore imports are expected to hit another record level this year after slipping 1,4% to 618,6-million tons in 2010.
Indian ore with 63,5% iron content continued to be offered at $181/t to $182/t, including freight, on Monday, traders said.
All the three major iron-ore indexes touched new eight-month highs at the close of trade on Friday.
The Platts 62% percent iron-ore index rose $1 to $175,50/t, cost and freight, and the Steel Index 62% benchmark climbed $1,3 to $172,60.
Metal Bulletin's 62% gauge jumped more than $2 to $171,43.
Forward swaps retreated as investors locked in recent sharp gains.
The January contract , cleared by the Singapore Exchange, slipped $1,50 to $173/t and the February contract fell $2,20 to $170,50. March dropped nearly $3 to $168,88.
Edited by: Reuters