Iron Ore-Shanghai rebar hits 1-month low on slowdown jitters

* Shanghai rebar down 2.3 pct on week, biggest since mid-June
* Other Shanghai commods plunge amid risk aversion
* Fall in rebar price may halt run-up in iron ore prices

By Ruby Lian and Manolo Serapio Jr

Shanghai/Singapore (Reuters) - Shanghai rebar steel futures fell more than 2 percent to their lowest in nearly a month on Friday, joining a rout in other commodities as investors exited riskier assets amid worries about a slowing global economy.

Fears that the U.S. economy could slip back to recession and a recent jump in Italian and Spanish bond yields towards danger levels have pushed investors to seek cover, pulling out of commodities from oil to base metals and grains and driving Asian stocks down around 5 percent after the worst sell-off on Wall Street since the global financial crisis.

Other Shanghai-traded commodities also fell sharply, with aluminium and zinc sliding by the daily trading limit.

The drop in rebar futures raised concern it could snuff out a recent run-up in prices of iron ore, the key steelmaking raw material, which had been spurred by rising steel prices.

"Market sentiment has been hit by worries over a slowing global economy and I am concerned that there will be a temporary end to the current upward trend in iron ore prices next week if steel prices continue to fall," said Zhang Chunzi, a broker with SDIC CGOC Futures in Beijing

The most-active January rebar contract on the Shanghai Futures Exchange fell as low as 4,803 yuan ($746) per tonne, its lowest since July 6, before closing down 2.4 percent at 4,807 yuan.

The contract lost 2.3 percent this week, its biggest drop since mid-June.

Steel mills and traders in China, the world's top steel producer and iron ore consumer, have started to step back amid mounting global market jitters, which may exert downward pressure on steel prices as well as iron ore prices.

Chinese steel mills have been producing at a record daily pace of nearly 2 million tonnes, capitalising on strong demand for long steel products amid a brisk construction sector, largely driven by Beijing's campaign to build more cheap houses.

"Restocking as well as rising steel prices have encouraged Chinese steel mills to accept higher price offers for iron ore," said an iron ore trader in Shenzhen city.

"But we might see the uptrend braking if steel prices fall because that means margins of steel mills would shrink."

Fears over the global economy also triggered declines in prices of iron ore forward swaps <0#SGXIOS:> on Thursday, reflecting concern recent price gains in the physical market may not be sustained.

Offers for Indian ore fines with 63.5 percent iron content climbed to as high as $190 per tonne, including freight, this week, although actual deals were below that, at around $186-188, trading sources said.

However, analysts said continued tightness in iron ore supply from India, the world's No. 3 exporter, should keep losses in spot prices in check.

"The Indian authorities are looking to continue to crack down heavily on illegal mining activities which is starting to affect the domestic market as well as the international market," said Christopher Ellis, analyst with Metal Bulletin Iron Ore Index.

Exports from India's southern Karnataka state, which have been on hold, are unlikely to resume anytime soon despite the appointment of a new chief minister on Wednesday to replace a predecessor who quit over a $3.6 billion illegal iron ore mining scandal.

Karnataka, which accounts for about a quarter of annual iron ore exports from India, banned shipments from July last year. India's top court ordered the state to lift the ban in April but exports have yet to resume.

Key global iron ore indexes, tracking spot deals in China and used by global miners to determine contract prices, extended gains on Thursday to hit their highest since mid-May.

The Steel Index's 62-percent iron ore reference price .IO62-CNI=SI rose 20 cents to $177.90 a tonne, its highest since May 17, and a similar gauge by Metal Bulletin [.IO62-CNO=MB edged up 88 cents to $178.57, its loftiest since May 12.

Platts 62-percent index IODBZ00-PLT was unchanged at $179.50 a tonne. ($1=6.439 yuan)

(sourced Reuters)

Iron Ore-Prices hold at 2-1/2-month high, upbeat sentiment

Thu Aug 4, 2011

* Karnataka exports unlikely to resume anytime soon
* Shanghai rebar futures stay near three-month highs
By Manolo Serapio Jr, Reuters

SINGAPORE, Aug 4 (Reuters) - Firm Chinese demand and tighter Indian supplies lifted spot iron ore prices to 2-1/2-month highs and traders said on Thursday that gains are likely to be sustained as long as China steel prices do not collapse.

Exports from India's southern Karnataka state, which have been on hold, are unlikely to resume anytime soon despite the appointment of a new chief minister on Wednesday to replace a predecessor who quit over a $3.6 billion illegal iron ore mining scandal.

Karnataka, which accounts for about a quarter of annual iron ore exports from India, the world's No. 3 supplier, banned shipments from July last year. India's top court ordered the state to lift the ban in April but exports have yet to resume.

Adding to the supply woes, India's Supreme Court last week banned mining in the iron ore-rich Bellary district in Karnataka.

"The market is very active right now. Problems in India and good steel demand in China are combining to push prices higher," said a Shanghai-based iron ore trader who sells Indian material to Chinese steel mills.

Some offers for Indian ore with 63.5/63 iron content have topped $190 a tonne, including freight, on Thursday, with the last spot cargo for that grade done at around $188, the trader said.

"We think the price can go up to $195 with the current level of activity and so long as Chinese steel prices don't fall sharply," he said.

Brisk trading pushed up index-based reference prices, based on spot deals in China and which global miners use in determining supply contract rates, to their loftiest levels since mid-May on Wednesday.

The price of 62-percent grade iron ore rose 0.3 percent to $179.50 a tonne, according to the Platts index IODBZ00-PLT.

A similar gauge by The Steel Index .IO62-CNI=SI edged up 0.2 percent to $177.70 and Metal Bulletin's benchmark .IO62-CNO=MB rose 0.6 percent to $177.69.

China's steel demand is getting a boost from its construction sector where a government drive to build more low-cost houses is encouraging steel mills to produce at breakneck speed.

The world's biggest steel producer and consumer, China expects this year's crude steel output to rise to a new record of between 690 million and 700 million tonnes from 627 million tonnes in 2010.

Shanghai rebar futures eased 0.3 percent to 4,929 yuan by the midday break, but still near the three-month top of 4,968 yuan reached on Monday.

"The iron ore market is relying on China and emerging economies and those countries are not so much tied up with what's going on in Europe and the United States," said Troy Flannery, senior mining analyst at DJ Carmichael in Perth.

"So prices should remain strong," he said.

Fears are mounting over a global economic slowdown amid a spate of poor indicators in the United States including weaker manufacturing and services sector numbers along with a deepening debt crisis in the euro zone.

Iron Ore-Shanghai rebar at 3-mth top on construction, US debt boost

Mon Aug 1, 2011

* U.S. congressional leaders agree to raise debt limit
* China social housing boom also buoying rebar prices
* Indian court bans mining in Karnataka's Bellary (Updates rebar futures, adds comment)

By Manolo Serapio Jr|Reuters

SINGAPORE, Aug 1 (Reuters) - Shanghai rebar futures rose to three-month highs on Monday, joining a relief rally in other commodities as the United States reached a deal to end an impasse over raising its debt ceiling to avoid a disastrous default.

Republican and Democratic lawmakers were expected to vote later in the day on a White House-backed deal which raises the United States' $14.3-trillion borrowing ceiling and cuts about $2.4 trillion from the deficit over the next decade.

The most-active January rebar contract on the Shanghai Futures Exchange rose as high as 4,968 yuan per tonne, a level not seen since May 4. It closed up 0.6 percent at 4,950 yuan.

"The U.S. debt breakthrough was a relief for investors, that's why we're seeing higher prices for most commodities and stocks," said a Singapore-based trader.

Also supporting gains in rebar prices is the construction boom in China where a drive to build 10 million cheaper houses this year is boosting demand for steel.

Construction of the remaining 50-60 percent of the 10 million units is expected to start before November "so there is a rush right now", said a trader in China's eastern Shandong province.

"Rebar prices in the physical market continue to increase and today prices in Beijing rose 20-50 yuan to around 5,050 yuan per tonne," he said.

Increased demand and prices were behind the record pace in China's steel production this year, with daily output averaging more than 1.9 million tonnes versus 1.7 million tonnes in 2010.

Daily steel output in China hit a record 1.998 million tonnes in June, and analysts expect the brisk clip to continue for the second half of 2011 as the low-cost housing boom buoys construction demand.

INDIA SUPPLY WORRIES

Higher steel output should encourage Chinese mills to restock on key raw material iron ore from later this week, traders said, keeping prices elevated.

Iron ore with 62-percent iron content rose 24 cents to $175.69 a tonne on Friday, the highest since May 19, based on the Metal Bulletin's index .IO62-CNO=MB.

The other two global indexes rose modestly, with The Steel index .IO62-CNI=SI at $175.50 and Platts IODBZ00-PLT at $177.25, hovering near two-month peaks touched last week.

Tight supply from India, the world's No. 3 iron ore supplier, is also expected to support prices, with shipments disrupted by monsoon rains and a political crisis in key Karnataka state seen further delaying resumption of exports.

The chief minister in Karnataka resigned on Sunday after an independent probe implicated the politician and several others in a $3.6 billion illegal iron ore mining scandal.

Karnataka banned iron ore shipments in July last year to curb illegal mining and has yet to issue export permits despite an order from India's Supreme Court to lift the ban in April.

Adding to supply worries, India's top court imposed an interim ban on mining in Bellary, where more than 80 percent of Karnataka's annual iron ore output comes from.

"Further disruptions to India's iron ore exports will tighten a seaborne spot market already under pressure from monsoon-affected Indian supplies, and struggling supply elsewhere," Commonwealth Bank of Australia said in a note.

"We continue to see iron ore prices supported above $150/tonne for the next 3-4 years, thanks to tight supply and strong demand."

Iron Ore-Spot prices, Shanghai rebar steady after gains

Tue Jul 19, 2011

* Optimism on China's steel demand intact
* Iron ore indexes flat to lower
By Manolo Serapio Jr

SINGAPORE/SHANGHAI, July 19 (Reuters) - Spot iron ore prices and Chinese steel futures steadied on Tuesday as buyers cast doubt on the sustainability of recent gains even as the long-term outlook remained upbeat.

Rebar futures in Shanghai have rebounded from three-month lows in June to hit their highest level since May on Monday on expectations China's drive to boost low-cost housing units will lift demand for construction steel in the second half of 2011.

"I am worried it's too early to be optimistic. The season for strong steel consumption hasn't come yet and the rise in steel prices does not seem solid amid tighter liquidity," said an iron ore trader in Shenzhen.

"Steel mills have built too much stocks over the past two weeks, so iron ore prices in the short term are still uncertain."

The most active October rebar contract on the Shanghai Futures Exchange was nearly flat at 4,906 yuan per tonne by 0530 GMT, after hitting a high of 4,915 yuan, near Monday's peak of 4,925 yuan.

Spot offers for iron ore were similarly steady, with Australian 62-grade Newman fines quoted at $179-$181 a tonne, including freight, and Indian 63.5/63 fines offered at $182-$184, said Chinese consultancy Umetal.

"I think the market's taking a breather. Iron ore prices have gone up too fast too soon and there has to be stronger evidence of steel consumption in China if people want to push prices further up," said an iron ore trader in Singapore.

Iron ore indexes, which track spot deals in China and which global miners use as benchmark to set quarterly contract prices, were flat to lower on Monday, after mostly rising since the start of July.

The Steel Index's 62-grade measure .IO62-CNI=SI eased 20 cents to $174.40 a tonne and a similar benchmark by Metal Bulletin .IO62-CNO=MB slipped 11 cents to $173.95.

Platts index IODBZ00-PLT was steady at $176.

But traders expect China, the world's No. 1 iron ore buyer, to continue buying more of the steelmaking raw material as mills look forward to increased steel demand from the government's social housing push and infrastructure investment.

"In the second half of this year, the overall iron ore import market should go well," said the Shenzhen trader.

China has imported 334.25 million tonnes of iron ore in January to June, up around 8 percent from a year ago, according to government data. If the current pace is sustained, imports are bound to hit a record near 670 million tonnes for the full year.

Gains in prices of forward swaps reflected optimism about Chinese demand, with Singapore Exchange-cleared contracts from July 2011 through December 2013 racing higher on Monday.

(By Reuters)

Iron Ore-Spot prices rise, Shanghai rebar at 3-week top

Fri Jul 8, 2011

* Shanghai rebar eyeing best week since early April
* China seen unlikely to sustain record steel output
* BHP resumes operations at Port Hedland

By Manolo Serapio Jr

SINGAPORE, July 8 (Reuters) - Spot iron ore prices rose on Friday as a brighter outlook for China's steel demand prompted mills to restock the raw material, with Shanghai steel futures edging up to three-week highs.

China's daily crude steel output hit a record high above 2 million tonnes towards the end of June, buoyed by increased construction of social housing units in the country. But some analysts expect the production pace to slow down.

"It's very difficult to see Chinese steel mills cutting production because local demand for long steel products is driven by local government investment and real estate remains strong," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.

The key October rebar contract on the Shanghai Futures Exchange hit a session-peak of 4,828 yuan per tonne, its highest since June 13. It stood at 4,818 yuan by the midday break, up 0.2 percent.

Shanghai rebar is up 2 percent for the week, its best weekly gain since early April.

Higher steel prices usually prod traders and steel mills to buy more iron ore, the key steelmaking material.

Offers for iron ore in the spot market rose $2 on Friday from Thursday, with Australian 62-grade Newman fines quoted at $176-$178 a tonne, with freight, Chinese consultancy Umetal said.

Ore with 63.6/63 iron content from India was quoted at $179-$181 a tonne.

"I think most of the buyers in the market are traders who are taking positions on expectations that prices will continue rising," said a shipping manager for an iron ore trading firm in Shanghai.

"But many of the steel mills still prefer to buy port stocks which are $3-$4 per tonne cheaper than spot prices."

The price of iron ore with 62 percent iron content rose 1.2 percent to $170.70 a tonne on Thursday, the highest since June 23, according to The Steel Index .IO62-CNI=SI.

A similar index by Platts IODBZ00-PLT was flat at $174 and that of Metal Bulletin's .IO62-CNO=MB was little changed at $169.76.

Traders said a brief suspension by BHP Billiton of shipments from Australia's Port Hedland also supported prices.

BHP, the world's No. 3 iron ore miner, said it will resume operations on Friday, a day after suspending rail and port movements when a worker was killed in a crane accident.

SHORT-LIVED

Liu at Mirae Assets said despite China's record steel production pace, demand could gradually ease during the normal summer lull when product inventories are likely to rise.

At the same time, he doubts whether there will be a big push on steel prices from China's social housing projects, estimating that the government's target of building 10 million houses this year should only require 20 million tonnes of steel, equivalent to just 10 days of domestic steel output.

"I don't expect the social housing project to boost demand as huge as some analysts believe and this round of iron ore restocking is likely to be short-lived," a Shanghai-based iron ore trader said.

"Since we are not expecting a big hike in steel demand in the summer, we are selling our materials at a loss as we just don't want to build up too much inventory," he said.

Reflecting expectations spot iron ore prices may not be able to build on recent gains, nearby forward swaps <0#SGXIOS:> slipped on Thursday.

The Singapore Exchange-cleared July and August contracts both dropped by more than a dollar to $169.75 and $167.83 a tonne, respectively. The September contract slipped 87 cents to $167.25. (By Thomson Reuters)

Iron Ore-Shanghai rebar dips, spot ore offers steady

Wed May 4, 2011 7:45am GMT

* Chinese rebar futures ease after hitting 2-month top
* Spot iron ore buying still slow
* Chinese inflation may moderate in H2-cbank official

SHANGHAI, May 4 (Reuters) - Shanghai rebar futures slipped 0.2 percent on Wednesday, after rising to two-month highs in the previous session, with a firm construction demand outlook in China capping losses.

The most active October rebar contract on the Shanghai Futures Exchange ended 12 yuan lower at 4,941 yuan ($761) a tonne, off an early low of 4,931 yuan.

"Demand is picking up," said Wang Dezhi, an analyst with Orient Securities Futures. "While the uptrend in raw material cost will be hard to reverse, steel prices will likely continue to rise this week."

There had been concern that steelmakers in China, the world's top producer, may curb output in view of power shortages that are likely to worsen during the summer.

But analysts say small Chinese steel mills are likely to take the brunt of the power shortages, the worst in years.

"The power shortage effect could be exaggerated at some point, and actually the output losses are just the tip of an iceberg," said Hu Yanping, analyst with Chinese consultancy Custeel.com.

China's average daily crude steel output has stayed at near record levels above 1.9 million tonnes since late February as steelmakers boosted output in anticipation of strong demand.

Hu expects China's daily crude steel output to stay around 1.9 million tonnes in May.

Global mining giant Vale , the world's biggest producer of iron ore, may have trippled for the first quarter, analysts estimated, as iron ore prices more than doubled.

MONETARY TIGHTENING

Firmer steel prices bode well for iron ore, the key raw material. Offers for high-grade 63.5 percent Indian material remained at $188-$190 per tonne on Wednesday, Chinese consultancy Umetal.com said.

Traders said there was a deal struck for Indian 63.5 percent iron ore fines at $189 per tonne on Tuesday, but the majority of small Chinese mills remain concerned about the demand outlook on worries China's monetary tightening cycle may extend.

"Some steel mills are worried that steel prices and demand may fall at the end May and in June, and they don't want to take the risk of buying forward shipments, which arrive in about a month," said a trader in Beijing.

But comments by a central bank official published on Wednesday showed Chinese inflation will moderate in the second half of the year as government measures to curb price rises hit their mark.

Key iron ore indexes, based on spot Chinese deals and which global miners use in setting contract prices, rose on Tuesday.

Metal Bulletin's 62 percent index .IO62-CNO=MB gained 28 cents to $181.73 a tonne, the highest since April 12.

Forward swaps <0#SGXIOS:> also rose, with all contracts from May 2011 through December 2013 cleared by the Singapore Exchange gaining as much as over $6 a tonne, reflecting investor optimism spot prices will remain firm.

Baoshan Iron and Steel said on Tuesday China's crude steel capacity may rise by 40 million tonnes this year, which may bring the country's capacity to more than 800 million tonnes, despite Beijing's campaign to block capacity expansion, especially by small-scaled privately-owned steel mills.

Baoshan Iron and Steel is a unit of Baosteel Group, China's second-biggest steelmaker in terms of output.

($1 = 6.497 Chinese yuan) (Reporting by Ruby Lian and Manolo Serapio Jr.; Editing by Ed Lane, sourced Thomson Reuters)

Iron Ore-Prices extend gains as restocking continues

Fri Apr 1, 2011 3:13am GMT

BEIJING, April 1 (Reuters) - Spot iron ore prices extended their recovery on Friday, inching towards $180 per tonne as Chinese buyers continued to replenish their stocks, but traders were still bracing themselves for another slump.

A commodities broker based in Hong Kong said most in the market still believed current prices were unsustainable, even after the pick-up in trade this week.

"We may have seen a jump this week but generally people are in the market for one or two shipments and that's it -- they will buy what they need but stockpiles are still pretty high," the broker said.

Industry consultancy Mysteel's 63.5-63 percent index for Indian fines on the Chinese market reached $179 per tonne on Friday, up $2 on the day and $8 since last week.

Platts 62 percent iron ore index IODBZ00-PLT ended Thursday unchanged at $175 a tonne after jumping $5.50 on Wednesday.

Metal Bulletin's 62 percent gauge .IO62-CNO=MB reached $172.87, up $3.16, while the Steel Index .IO62-CNI=SI saw a $1.90 increase to $172.40.

The broker said the relatively large increases might have been down to a decision by Rio Tinto and BHP Billiton to auction off a number of cargoes this week.

"They have each got a dozen customers and they hold internal auctions of cargoes -- these didn't previously go into the index but now they do, and they might have a substantial impact," he said.

Three Chinese traders contacted by Reuters on Friday said the consensus in the market was that prices will fall to around $160-165 in the coming month.

As the second quarter begins, the rationale behind the three-month pricing system used by the big iron ore suppliers could be further undermined, the broker suggested.

According to the new rules, April-June prices will be based on an average of index prices from December to February. Despite a slump in spot iron and steel prices in March, mills are now facing record-high contract iron ore costs.

Reuters calculations suggest that three-month contract prices could rise 20 percent to almost $180 per tonne beginning on April 1. [ID:nL3E7E107E]

"The buyer has a choice and he could say that he doesn't want the benchmark but wants the spot price instead -- and that could force (the spot price) up," said the broker. (Reporting by David Stanway; Editing by Ken Wills, sourced Reuters)

Tags :BHP Billiton, Chinese iron ore traders, raw material, steel mills, steelmaking, spot prices

Iron Ore-Shanghai rebar falls; iron ore heads for flat Q1 end

Wed Mar 30, 2011 8:17am GMT

* Tighter credit weighing on China ore stockpiling
* India Apr-Feb iron ore exports down 18 pct
* India eyes another hike in iron ore freight rates
By Nick Trevethan

SINGAPORE, March 30 (Reuters) - Shanghai steel rebar futures dropped 0.4 percent on Wednesday, snapping a three-day winning streak, while iron ore indexes edged up, heading for a flat end for the first quarter as tighter liquidity hit stockpiling by top buyer China.

The most briskly traded rebar contract for October delivery on the Shanghai Futures Exchange closed down 20 yuan at 4,794 yuan a tonne, after gaining 2 percent in the past three sessions.

"The abundant liquidity of the past two years created a huge build-up in steel inventories, but this year tighter liquidity will mean building additional inventory will be very difficult," said Henry Liu, analyst at Mirae Asset Securities in Hong Kong.

"The cash situation for consumers is still adequate so it is too early to say they will dump inventory," he said.

"In iron ore, the second quarter will be weaker than the first. Prices will fall, with support at $160 to $165 but the downside is limited as Chinese steelmakers are running at full steam."

China's daily output of crude steel rose 2.6 percent to a record 1.945 million tonnes from March 11-20, figures from the China Iron and Steel Association (CISA) showed on Tuesday.

CISA said daily output stood at an average of 1.92 million tonnes in the first 20 days of the month, up from 1.823 million tonnes in February and 1.703 million tonnes in January.

According to Reuters calculations, average daily steel output up to March 20 stands at 1.81 million tonnes, which would amount to 659.5 million tonnes on an annualised basis.

The Shanghai rebar contract remains near an eight-session high, having hit a four-month low of 4,627 yuan on March 22, but is down 1.6 percent this quarter.

INDIA HIKES FREIGHT RATES AGAIN

"Most industrial commodities have recovered from the shock after the Japan earthquake and now are just waiting to see what the impact on Japanese supply will have on demand," said analyst William Adams at FastMarkets.com

"China is also a worry. China is still tightening policy and there is the fear they will overtighten and the economy will slow too quickly."

Key iron ore indexes, based on spot transactions in China, rose on Tuesday.

Platts' 62 percent iron ore index IODBZ00-PLT rose 50 cents to $169.50 a tonne, including freight, and The Steel Index's 62 percent benchmark .IO62-CNI=SI gained $1.10 to $168.50.

Metal Bulletin's 62 percent gauge .IO62-CNO=MB rose $1.12 to $167.97.

In India, iron ore exports from the world's third-largest supplier fell for the eighth straight month in February as its key Karnataka state continued to ban shipments.

India's iron ore exports fell 18 percent to 85.43 million tonnes in April-February from a year ago and shipments are expected to fall again in March.

Iron ore supply from India are bound to get even tighter as it becomes more costly to ship the steelmaking material out of the country.

State-owned Indian Railways said it will impose a "busy season charge" of 7 percent on iron ore freight rates from April 1 to June 30, and from Oct. 1 to March 31.

India had hiked railway freight rates by 100 rupees to 1,600 rupees per tonne from March 3.

Iron Ore-Spot prices tick up on slow Chinese buying

Fri Mar 25, 2011 4:25am GMT

* Chinese mills restock on iron ore at slow pace
* Shanghai rebar futures steady
* BHP details $9.5 bln iron ore, coal expansion plan

By Manolo Serapio Jr

SINGAPORE, March 25 (Reuters) - Spot iron ore prices edged up on Friday as some Chinese mills restocked the steelmaking ingredient, but purchases were far from brisk given lacklustre steel prices.

Steelmakers in China, the world's biggest steel market, had slowed iron ore purchases after aggressive stockpiling early this year lifted prices to record highs in mid-February.

Iron ore prices have lost around 13 percent since hitting those peaks last month.

"Chinese mills have kept production at a high level and they've run down on iron ore inventories quite dramatically to the point where they now have to come back to the market and buy," said Graeme Train, commodity analyst at Macquarie Securities in Shanghai.

"The problem is that mills don't want to commit to a large amount of tonnage when steel prices are not performing very well, so it seems like you've hit a bit of stabilisation and it's a bit tricky for prices to fall because mills have to buy."

The most active October contract on the Shanghai Futures Exchange was steady at 4,716 yuan a tonne by the midday break.

The contract is down 0.8 percent on week, having fallen to four-month lows on Tuesday.

Offers for Indian ore with 63.5 percent iron content improved to $171-$173 a tonne, including freight, on Friday, said Chinese consultancy Mysteel, from $170-$172 for most of this week.

The Steel Index's 62 percent iron ore benchmark .IO62-CNI=SI rose 0.5 percent to $166.40 a tonne on Thursday, while other indexes were steady.

Platts 62 percent index IODBZ00-PLT stood at $168.50, unchanged for a fifth straight session, and Metal Bulletin's 62 percent index .IO62-CNO=MB was nearly flat at $164.92.

STEEL DEMAND NOT COLLAPSING

Iron ore prices are likely to stabilise at current levels unless Chinese steel demand picks up strongly, analysts said, while market players assess the impact on steel demand from a reconstruction in disaster-hit Japan.

Japan's steel mills were largely unscathed after the ferocious March 11 earthquake and tsunami and production disruptions would likely mean a total volume loss of 10 million tonnes for 2011, said Colin Liang, analyst at Bank of America Merrill Lynch.

That represents 9 percent of the 109.6 million tonnes of crude steel Japan made last year. Japan is the world's second-largest steel producer after China.

"Iron ore prices should be going up. Steel demand seems fine, it's not exciting but not collapsing either and production is at a reasonably high level," said Macquarie's Train.

"But because credit is a bit of an issue, people are not forward ordering a lot of material, they're not willing to build up their own inventory and that's taken some of the urgency out of purchasing and as a result you're just not seeing any real movement in prices at the moment," he added.

China has been tightening monetary policy and restricting credit to cool growth.

Further gains in iron ore forward swaps <0#sgxios:> suggested some players remain upbeat, with all 24 contracts through February 2013 edging up, and big gains seen for the nearby second-quarter period.

In industry news, BHP Billiton , the world's No. 3 iron ore producer, said it has approved $9.5 billion of capital investment to expand its Australian iron ore and coal mining operations.

"The big risk that hangs over the iron ore market is when you look at 2013, 2014 and all of the supply that's expected to come online following a lot of these capital expenditures," said Ben Westmore, commodity economist at National Australia Bank.

Spot iron ore prices, which gained more than 40 percent in 2010, are likely to remain high until new supply comes in.

Global seaborne supply of iron ore has been increasing by 20 million to 40 million tonnes in recent years, but production expansion plans by global miners could boost annual supply by around 100 million tonnes from late 2012 to early 2013, analysts have said.(sourced Reuters)

Tags : raw material, steel plants,

Iron Ore-Spot stabilises after falls as steel prices gain

Thu Mar 17, 2011 7:19am GMT

* Hopes of increased steel demand after Japan quake
* Indian 63.5 pct ore quoted at $170-$172/tonne
* Iron ore unlikely to hit $192 again this year-analyst
* China 2011 iron ore imports seen up 6 pct (Updates Shanghai rebar prices)
By Manolo Serapio Jr

SINGAPORE, March 17 (Reuters) - Spot iron ore prices stabilised on Thursday as steel prices in top producer China bounced back after recent losses, backed by hopes Beijing can export more overseas when quake-hit Japan begins reconstruction.

Japan overtook China as Asia's biggest steel exporter last year. But shipments from Tokyo may slow when the country focuses its output on rebuilding, opening a gap that may be filled by China as well as South Korea, Japan's biggest customer.

"Sentiment is slightly getting better because steel prices are moving up. We have more inquiries from the steel mills although purchases have not picked up yet," said an iron ore trader in Shanghai.

"Chinese mills are thinking they might have a good chance to sell their products and people are anticipating steel demand to pick up after the Japan disaster."

Power outages in Japan following last Friday's ferocious earthquake and tsunami will hit output of the world's second-largest producer and boost demand for China's steel products, a former official of the China Iron and Steel Association said on Thursday.

Spot steel prices have been slowly rising after dropping for two weeks, with steel billet in Tangshan up more than 80 yuan per tonne this week, said the Shanghai trader.

Shanghai steel rebar futures have rebounded 3.8 percent since hitting four-month lows on Monday. The most active October contract on the Shanghai Futures Exchange closed at 4,817 yuan a tonne on Thursday, down a modest 0.3 percent.

"Steel has pushed up in the last few days and these levels give the mills a very healthy margin," said an iron ore trader in Singapore.

Iron ore imports by top buyer China are forecast to rise 6 percent this year from nearly 619 million tonnes in 2010 on higher steel output, said an official from China's mining association.

MORE DOWNSIDE SEEN

Offers for Indian ore with 63.5 percent iron content were steady at $170-$172 a tonne on Thursday, including freight, traders and Chinese consultancy Mysteel said.

But some analysts say iron ore prices could drop further in the near term on weaker demand from Japanese mills before a rebound that may be capped.

"Japanese steel mills will reduce their purchases in the short term which poses further downside risk in the seaborne market," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.

"We expect iron ore prices to rebound once steel demand recovers. However, it is unlikely to hit $192 per tonne again this year."

Spot iron ore prices had been falling since hitting a record high near $200 a tonne in mid-February as top buyer China slowed purchases after steel prices dropped.

Key iron ore indexes, which global miners use in setting quarterly contract rates, were steady to lower on Wednesday, while forward swaps jumped after a recent selloff.

Platts' 62 percent iron ore index IODBZ00-PLT was unchanged at $165 a tonne. That was previously the lowest for the index since Nov. 25.

Steel Index's 62 percent benchmark .IO62-CNI=SI slipped $1.10 to $163.60, a level not seen since Nov. 19. Metal Bulletin's 62 percent gauge .IO62-CNO=MB eased a dollar to $162.89, its weakest since Dec. 6.

Singapore Exchange-cleared forward swap prices rebounded although they remained at steep discount to spot prices. The April contract rose more than 4 percent to $153.33 a tonne and May climbed 3.6 percent to $151.58. (Additional reporting by Ruby Lian in Shanghai Editing by Ed Lane,sourced:Reuters)

Iron Ore-Indexes at over 3-mth low, Baosteel keeps prices steady

Tue Mar 15, 2011 8:05am GMT
* Chinese mills keep prices unchanged on weak steel demand
* Indian 63.5 ore quoted lower at $170-$174/tonne
* Shanghai rebar up modestly after drop to 4-mth low (Adds comments, updates rebar prices)
By Manolo Serapio Jr. and Ruby Lian

SINGAPORE/SHANGHAI, March 15 (Reuters) - Spot iron ore prices lost more ground on Tuesday as key indexes fell to more than three-month lows on the prospect of thinner Japanese demand after a massive earthquake and tsunami disrupted steel output.

Expectations of weaker Japanese demand for the steelmaking ingredient fueled a further decline in spot prices that have already been falling since hitting record highs near $200 a tonne in mid-February on slower purchases from top buyer China.

Japan is the world's second-largest steel producer after China.

Baoshan Iron and Steel , China's biggest listed steelmaker, said on Tuesday it would keep prices for key products unchanged for April bookings, after raising prices for the past three months, as Chinese steelmakers deal with weaker steel demand and rising inventories.

Wuhan Iron & Steel , China's third-largest steelmaker, also kept its main product prices steady for April.

"The steel market in China is still very weak. There are no signs of demand from the downstream sector picking up," said an iron ore trader in China's eastern Shandong province.

"If steel prices continue dropping, some mills might close by the end of this month. They cannot make any profit, and it's very hard to secure bank loans."

The most active rebar contract for October delivery on the Shanghai Futures Exchange rose 0.9 percent to close at 4,774 yuan a tonne on Tuesday, after hitting a four-month low of 4,641 on Monday.

MIXED VIEWS

The suspension of production at some Japanese steel mills has raised concern iron ore demand may weaken further, deflating prices even more. Japan imports around 135 million tonnes of iron ore a year, mostly from the seaborne market.

Japanese mills were diverting cargoes of metallurgical coal, another steelmaking material, due to plant outages, trade sources said.

Indian ore with 63.5 percent iron content was being offered in China at $170-174 per tonne, including freight, on Tuesday, down from around $175 on Monday, although bids were few and much lower at $165, traders said.

Iron ore indexes, which global miners use in setting quarterly contract prices, slid again on Monday.

Platts' 62 percent iron ore index IODBZ00-PLT dropped 1.5 percent to $165.50 a tonne, a level not seen since Nov. 25.

Steel Index's 62 percent benchmark .IO62-CNI=SI slipped 0.7 percent to $166.30 and Metal Bulletin's 62 percent gauge .IO62-CNO=MB slid 1.2 percent to $165.73 a tonne, both the lowest since Dec. 10.

Prices for iron ore forward swaps also extended losses as investors anticipated weaker spot prices ahead although Monday's decline was not as sharp as Friday's.

"Most players are still adopting a wait-and-see attitude and the buying interest from end-users remain weak with thin trading activity in the physical market," said Destiny Guo, an iron ore physical and derivatives broker at Market Securities.

But some analysts say the eventual reconstruction in Japan could push up raw material prices going forward.

"There's no doubt there's going to be quite a substantial lift in both iron ore and coking coal demand in six to 12 months time and demand should remain firm after that," said Mark Pervan, senior commodity analyst at ANZ Bank in Melbourne.(Editing by Himani Sarkar,sourced:Thomson Reuters)

Tags : Japanese steel plants, earthquake, Baoshan Iron and Steel Co., Platts, raw material, ANZ

Iron Ore-Spot prices steady in India, China; steel demand eyed

Thu Mar 10, 2011 6:51am GMT
* Iron ore indexes at two-month lows; China imports slow
* Port Hedland sees 16 pct dfrop in shipments
* Stockpiles, steel demand eyed for signs market turning positive

SINGAPORE, March 10 (Reuters) - Steel prices extended losses in China on Thursday, while spot iron ore was steady to lower at around $180 a tonne as traders watched for signs of a turnaround in steel demand that would also herald a rally in ore prices.

Spot Indian fines around 63-63.5 percent iron were quoted at around $180 a tonne by consultancy Mysteel. By 0618 GMT, the 62 percent March iron ore futures contract on the Indian Commodity Exchange was 8,105 rupees ($180) per tonne, up 1.50 rupees.

Platts 62 percent iron ore benchmark IODBZ00-PLT fell $1 to $175 a tonne on Wednesday, extending its losing streak to a 15th consecutive session.

The index, widely used by global miners in setting quarterly contract prices, has lost 9.3 percent since hitting a record high of $193 in mid-February as demand from top iron ore buyer China slowed last month.

But the Steel Index's 62 percent gauge .IO62-CNI=SI was unchanged at $171.60 but Metal Bulletin's index .IO62-CNO=MB dropped $1.30 to $171.95 and all three indexes are at their lowest levels since early January.

China's iron ore imports in January-February rose 22.6 percent from a year ago to 120 million tonnes, China's customs agency said in a statement on Thursday.

"(January) demand was strong and prices were rising just because of supply issues in Brazil and Australia, and some materials (due in February) were brought forward to January," said Graeme Train, analyst with Macquarie in Shanghai.

China imported a record 68.97 million tonnes of the raw material in January, suggesting the volume tumbled to 51.03 million tonnes in February, according to Reuters calculations.

The price of ore has been in a steady decline for around three weeks on reduced Chinese appetite for imports due to high prices and a lacklustre steel market.

Shanghai's most-active steel rebar futures contract for October, fell 1.7 percent to 4,688 yuan a tonne and earlier dipped to 4,683 yuan, its weakest since mid November.

Iron ore shipments from Australia's Port Hedland fell 16 percent in February to 12.85 million tonnes from 15.33 million tonnes in January, according to port authority figures.

Shipments to China fell to 9.03 million tonnes in February from 9.97 million tonnes in January, the data showed.

Exports from India's largest port of Mormugao also dropped last month, falling 4.2 percent from a year earlier to 4.5 million tonnes.

Analysts said that suggested comparatively weaker import data for March too, with Chinese buyers meeting more of their needs from stockpiles of imported ore ashore at Chinese ports, currently standing near record highs, above 80 million tonnes.

"If you include floating stocks, inventories have been falling since mid January," Macquarie's Train said.

He noted the weakness in recent weeks in iron ore and worries about falling steel prices had made mills cautious, but added: "Once you start to see steel end use pick up, it will translate into a rapid recovery in ore prices."

(Reporting by Nick Trevethan; Additional reporting by Rujun Shen; Editing by Ed Lane, sourced :Thomson Reuters)

Iron Ore-Key index falls for 14th day, Shanghai rebar steady

Wed Mar 9, 2011 5:51am GMT

* Iron ore indexes at two-month lows on lean China demand
* India's top port iron ore exports down 4.2 pct in Feb

SINGAPORE, March 9 (Reuters) - Chinese steel futures were steady on Wednesday after iron ore indexes fell to two-month lows as mills remained wary of buying more raw material until they see a pickup in demand for their products.

Platts 62 percent iron ore benchmark IODBZ00-PLT fell $1 to $176 a tonne on Tuesday, extending its losing streak to a 14th consecutive day.

The index, widely used by global miners in setting quarterly contract prices, has lost 8.8 percent since hitting a record high of $193 in mid-February as demand from top iron ore buyer China thinned.

Two other key indexes also extended their declines. The Steel Index's 62 percent gauge .IO62-CNI=SI slipped $1.20 to $171.60 and Metal Bulletin's index .IO62-CNO=MB dropped $1.72 to $173.25.

All three indexes are at their lowest levels since early January.

"As steel prices fell in China, iron ore prices are facing a lot of headwinds," said Henry Liu, regional head of Commodities Research at Mirae Assets.

Of the 80 million tonnes of iron ore stocks at Chinese ports, nearly 35 million to 40 million tonnes belong to traders, who were betting on a recovery in steel demand after the Lunar New Year holiday last month, said Liu.

"But we haven't seen any obvious pickup in steel demand, and to the disappointment of traders, steel prices have declined since the end of Lunar Near Year."

Shanghai steel rebar futures rose 11 yuan to 4,784 yuan a tonne at 0545 GMT, slightly above the previous session's nadir of 4,755, its weakest since Dec. 1.

Iron ore prices have fallen steadily for around three weeks as Chinese steel producers, worried about the high cost of ore and falling steel prices trimmed purchases of overseas feedstock.

Chinese port stocks dipped marginally last week, but at more than 80 million tonnes are still near record levels, and the tighter credit market in China may mean owners of some of that ore will want to sell in light of higher financing costs.

China's daily average crude steel output over Feb. 21-28 reached 1.912 million tonnes, up 5.5 percent compared with the previous 10 days, data from the China Iron and Steel Association showed on Tuesday.

On an annualised basis, China is set to produce 665 million tonnes, according to Reuters calculations -- in line with an output forecast of 660 million tonnes made by the Ministry of Industry and Information Technology last month.

Iron ore exports from India's largest port of Mormugao fell 4.2 percent in February from a year earlier to 4.5 million tonnes, as higher taxes and an export ban from a southern state looked set to weigh further on shipments.

A Mormugao port official said exports to date from April 2010 were 36.7 million tonnes, versus 36.2 million tonnes from a year ago, which included iron ore from neighbouring Karnataka state before it imposed an exports ban. (Reporting by Nick Trevethan; Additional reporting by Rujun Shen; Editing by Manolo Serapio Jr., sourced :Thomson Reuters)

Tags :commodities Research, Mirae Assets Securities, Mormugao port, steel prices, raw material, Argentina's steelmakers, Indian iron ore traders exporters

Iron Ore-Spot extends losses as China sits out

Tue Mar 8, 2011 4:22am GMT

SINGAPORE, March 8 (Reuters) - Spot iron ore prices extended losses on Tuesday, with Chinese buyers still shunning the market waiting for further falls or a recovery in steel prices, but supply disruptions from Western Australia could limit the downside, traders said.

Indian ore with 63.5 percent iron content was quoted in China at $181-$183 a tonne, including freight, on Tuesday, down from $182-$184 on Monday, said Chinese consultancy Mysteel.

The 62 percent March iron ore futures on the Indian Commodity Exchange (ICEX) traded flat on Monday at 8,098 rupees per tonne.

Markets may see some support after Australian miner Fortescue Metals Group trimmed its March quarter production guidance to a range of 8.5-9.0 million tonnes, down 0.5 million tonnes, after heavy rains hit its mining operations in the Pilbara area of Western Australia.

Rio Tinto , which also mines iron ore in the region, said its operations had been impacted by adverse weather conditions during the first quarter, but that it will announce any impact in its quarterly report. Other smaller miners in the area may also have been affected, traders said.

"We have seen some slowing of shipments from the northern Pilbara due to the wet. It hasn't really shown up in China port stocks yet, but we could see some erosion from the current high levels," said a Sydney-based commodities trader.

Port stocks in China, above 80 million tonnes, are around record highs as Chinese consumer hold back from buying, hoping for prices to continue to fall and a pick up in steel demand.

The most active rebar contract for October delivery on the Shanghai Futures Exchange was slightly lower at 4,821 yuan per tonne by the midday break, after having slid to 4,770 yuan last week, its weakest since Dec. 1.

Key iron ore indexes, which global miners use in setting quarterly contract prices, extended losses on Monday.

Platts 62 percent iron ore benchmark IODBZ00-PLT fell $1 to $177 a tonne. It has lost 8.3 percent in the past 13 sessions since hitting a record high of $193 in mid-February.

The Steel Index's 62 percent gauge .IO62-CNI=SI slipped $3.80 to $172.80 and Metal Bulletin's index .IO62-CNO=MB dropped $1.86 to $174.97. (Reporting by Nick Trevethan; Editing by Himani Sarkar,sourced:Thomson Reuters)

Tags :Chinese steel mills, Chinese steelmakers, rebar contract for Oct delivery, Shanghai Futures Exchange, Platts, Rio Tinto, Australia's Fortescue Metals Group

Iron Ore-Spot price falls; China gripes about monopoly prices

Mon Mar 7, 2011 3:31am GMT

SINGAPORE, March 7 (Reuters) - Spot iron ore prices extended losses on Monday, after China's No. 3 steelmaker, Wuhan, said global miners BHP Billiton, Rio Tinto and Vale were capable of setting prices arbitrarily, and port stocks in the top consumer held near historic highs last week.

Indian ore with 63.5 percent iron content was quoted in China at $182-$184 a tonne, including freight, on Monday, down from $183-$185 on Friday, said Chinese consultancy Mysteel.

Stockpiles of imported iron ore at major Chinese ports dipped 260,000 tonnes to end at 80.79 million tonnes last week, Mysteel said on Friday.

But with inventories holding near historic highs and Chinese steelmakers critical of high prices, there was a risk the downtrend in the spot market could continue.

"The cost of extracting 1 tonne of iron ore is $20, delivery costs are $56 and it is selling for $180-$190 -- this is a monopoly in the true sense of the word," said Wuhan Iron and Steel president Deng Qilin said on Saturday at a news conference on the sidelines of the National People's Congress in Beijing.

Falling steel prices, huge stockpiles of iron ore at Chinese ports and tighter liquidity are keeping Chinese steel mills and traders from snapping up ore even as exports from No. 3 supplier India get more costly after the country announced plans to raise export taxes and freight rates.

But India's mineral industries body wants the government to abandon plans for a fourfold hike in export duties of low-grade ore.

The 200-member strong Federation of Indian Mineral Industries (FIMI) will ask for a full rollback of planned export duties on iron ore lumps and fines to pre-budget levels on Monday, Secretary-General R.K. Sharma said on Friday.

The most active rebar contract for October delivery on the Shanghai Futures Exchange was little changed on Monday at 4,822 yuan per tonne, after having slid to 4,770 yuan on Friday, its weakest since Dec. 1.

Key iron ore indexes, which global miners use in setting quarterly contract prices, extended losses on Friday.

Tags :rebar contract for Oct delivery, iron ore key indexes, FIMI, iron ore port stocks

Platts 62 percent iron ore benchmark IODBZ00-PLT fell $2 to $178 a tonne. It has lost 7.8 percent in the past 12 sessions since hitting a record high of $193 in mid-February.

The Steel Index's 62 percent gauge .IO62-CNI=SI slipped $1.30 to $176.60 and Metal Bulletin's index .IO62-CNO=MB dropped $1 to $176.83.

The Dalian Commodities Exchange, which predominantly focuses on agricultural commodities, submitted a proposal to the government at the end of last year to launch the world's first metallurgical coke contract, its Vice President Li Jun told Reuters on the sidelines of an industry conference in Malaysia.

"We are still waiting for approval from the China Securities Regulatory Commission, we hope it will be launched this year," he said. (sourced:Reuters)

Tianjin imported iron ore market remains weak

Thursday, 03 Mar 2011

It is reported that imported iron ore market in Tianjin remains weak with thin enquiries and slim transactions. With the sharp plunge in imported iron ore futures market and steel market, most traders are not so upbeat on market outlook in the coming days.

Strong wait-and-see attitudes dominate the market. Currently, 63.5% Indian fines at Tianjin port is settled at CNY 1370 per tonne to CNY 1380 per tonne, PB fines is quoted at CNY 1300 per tonne to CNY 1310 per tonne, 58% Indian fines goes at CNY 1050 per tonne to CNY 1070 per tonne.

Most steel mills’ buying interests are weak and they adopt wait-and-see attitudes. A handful of small and medium steel mills expressed that they might purchase next week, as they only hold few stocks. India announced on Monday a uniform 20% increase on export duties for iron fines and lumps. Impacted by the tax hike, offers from miners reduce with some suspending offers. Most steel mills prefer to purchase spot cargoes currently.(sourced:mysteel)

Indian export tariff hikes to strongly impact Chinese iron ore market

Tuesday, 01 March 2011

The India government has announced that as of February 28 the export tariffs on Indian fine ore and lump ore will both rise to 20 percent, while the export tariffs on iron ore pellets have been cancelled. The previous export tariffs on Indian fine ore and lump ore were five percent and 15 percent respectively.

After the adjustment, if we calculate the price on the basis of the current Indian ore (Fe 63.5 percent) price of $170/mt FOB, the export costs of fine ore will increase by $22-25/mt. Thus, Indian iron ore traders' profits will be hit strongly, and they may even incur losses. According to previous experience when India adjusted its export tariffs, the increased export costs will be passed on to Chinese traders by Indian miners and traders, and this would be expected to provide support for the currently weak Chinese iron ore market. Since India started to restrict its iron ore exports from 2007, its iron ore export tariffs have been adjusted constantly, while at the same time the share of iron ore imported by China from India has continued to decline.

Share of Indian iron ore in China's total iron ore import volume from 2000:

After the Spring Festival, the price of imported Indian ore for China started to decline gradually. In line with the recent weakness of the construction material market in China, the prices of imported iron ore have begun to fall, with the price of Indian fine ore (Fe 63.5 percent) falling to $188/dry metric ton CFR in late February from $198/dry tons CFR in mid-February. At present, purchase volumes from steel mills in China are on the low side.

Spot prices and CFR iron ore prices from India to China since 2009:

Indian iron ore export tariffs adjustment from May 2007 to February 2011:

Tags: iron ore , raw mat , China , India , Far East , Indian Subcon , imp/exp statistics , quotas & duties , steelmaking , trading , mining , East Asia and Pacific , South Asia, share of Indian iron ore, China's total iron ore import, data
(sourced:steelorbis)

Iron Ore-Prices steady as market weighs India tax hike

Tue Mar 1, 2011 8:04am GMT

* Prices could rise $10-$15 near term on India move-trader

* India quadruples export tax on iron ore fines
(Updates Shanghai rebar price, adds China steel output)

By Manolo Serapio Jr

SINGAPORE, March 1 (Reuters) - Spot iron ore prices were mostly steady on Tuesday as slow demand from top buyer China tempered the impact of India's move to raise export duties, although traders said they expect prices to edge up later in the week.

India, the world's third-largest iron ore exporter, on Monday said it will quadruple export duties on iron ore fines to 20 percent as it seeks to curb exports, mostly destined for China.

The move which should further tighten global supply of the steelmaking ingredient and is likely to fuel another rally in iron ore prices, which have declined since hitting record highs in mid-February.

Indian ore with 63.5 percent iron content was quoted at around $188 a tonne, including freight, in China on Tuesday, said Chinese consultancy Mysteel.

"I think the increase in iron ore tax would have an impact on prices but it will take at least a couple of days for that to sink in," said a Shanghai-based iron ore trader who sells Indian cargoes to China.

"People would prefer to wait and watch. Prices had been coming down before the tax was announced, so they would stabilise first then there might be a slight increase," he said, adding he expects the Indian 63.5 percent grade to hit $190 within the week.

China's appetite for iron ore thinned last week as steel prices retreated after hitting a series of record highs last month, reflecting worries that Chinese steel demand might not pick up strongly because of the government's campaign to tighten monetary policy.

China's crude steel output rose 6 percent in the first 20 days of February from January, but stockpiles of steel products at major enterprises rose to 9.46 million tonnes from 7.57 million tonnes at the end of January, data from the China Iron and Steel Association showed.

STALEMATE

"I think there is a stalemate between the buyers and sellers right now and for us buyers we totally depend on the steel price in China," said a trader in China's eastern Shandong province.

"If the steel price would increase then we could accept any offers but I'm not sure the market is ready to accept ore at $200 because the end-user cannot accept the higher cost."

The most active steel rebar contract for October delivery on the Shanghai Futures Exchange fell to a two-month low of 4,816 yuan a tonne on Tuesday. It closed at 4,837 yuan, down 1.3 percent.

Huge stockpiles of imported ore at Chinese ports, which exceeded 80 million tonnes last week, are also deterring Chinese steel mills and traders from snapping up Indian material in the spot market.

"As long as you have a lot of stock available at ports which is typically cheaper than new imports, people would prefer to consume that first," said the Shanghai trader.

Still, Indian spot prices could rise by $10 to $15 a tonne in the near term because of the duty hike, said the Shandong-based trader.

Forward swaps rose on Monday as investors looked to more price rises. The Singapore Exchange-cleared March contract gained 0.7 percent to $176.67 a tonne, April rose nearly 2 percent to $167.17 and May jumped 2.3 percent to $163.92.

All three key iron ore indexes, which global miners use in determining quarterly contract prices, fell.

Platts iron ore benchmark IODBZ00-PLT slipped 50 cents to $183 a tonne, its weakest since Jan. 17 and marking its eighth consecutive session of losses.

Metal Bulletin's 62 percent index .IO62-CNO=MB dropped $1.36 to $180.5 a tonne, and The Steel Index's 62 percent gauge .IO62-CNI=SI slid $1.30 to 182.8, their lowest since mid-January.

Global miners like Vale and Rio Tinto are likely to raise second-quarter iron ore contract prices by 20 percent to an all-time high after spot prices hit a record peak this month, Reuters calculations showed on Monday.(Editing by David Fogarty,sourced Thomson Reuters)

Tags :Tags :raw material, Indian fine iron ore prices,CISA,iron ore traders, Platts, Metal Bulletin

Iron Ore-Spot prices flat on demand concerns

Mon Feb 28, 2011 3:46am GMT, Reuters

SHANGHAI Feb 28 (Reuters) - Spot prices of iron ore stood unchanged on Monday after slumping 5 percent from mid-February, with Chinese steelmakers expecting prices to fall further on demand uncertainties.

Indian ore with 63.5 percent iron content was quoted in China at $191-193 per tonne including freight, unchanged from last Friday, traders said, but demand remained murky as Chinese steel mills hoping for more falls are refraining from making large bookings.

"We can't tell how the market will go so far. Demand is weak and steel mills still don't want to buy unless steel prices rise strongly," said an iron ore trader in Shanghai.

Last week, steel mills in China stayed on the sidelines of the market and a few deals were sealed with Indian suppliers at below $190 per tonne including freight.

Uncertainty regarding steel demand and prices have triggered more concern among steel mills, who are expecting iron ore prices to break $180 per tonne in the near future.

The benchmark rebar contract for October delivery on the Shanghai Futures Exchange SRBV1 crawled 0.5 pct higher to close at 4,893 yuan ($744.3) per tonne by the midday break from the previous close, but was still near a two-month low.

Three global iron ore indexes also fell last Friday. The Platts' 62 percent iron ore index IODBZ00-PLT dropped for the seventh straight session to $183.5 per tonne, $1.25 lower than the previous close and a the lowest since Jan. 17.

Metal Bulletin's 62 percent index .IO62-CNO=MB edged down $1.72 to $181.86 per tonne, and the Steel Index's 62 percent gauge .IO62-CNI=SI stood unchanged at 184.1 per tonne, both hitting their lowest since Jan. 19. ($1=6.574 Yuan) (Reporting by Ruby Lian and Tom Miles; Editing by Jonathan Hopfner)

Tags:Shanghai Futures Exchange, The Platts iron ore index, Metal Bulletin, The Benchmark rebar contract

Iron Ore Prices Down Again Due To Unstable Steel Prices

Sophia Fain 11:48AM, February 23, 2011

Platts reported that "Seaborne iron ore cargo prices slid again Wednesday as buyers remained resistant to purchasing in the spot market.

The Platts 62%-Fe fines assessment was down 75 cents to $186.75/dry mt, and the Platts 63.5/63%-Fe assessment was down also down 75 cents at $191.75/dmt. Transactions were limited in the spot market, as buyers held back from purchasing, and trade slowed down...

'There are still some buyers in the bearish market, who are waiting for the right time and the right price to buy a spot cargo,' said a Shanghai trader.

'The price for iron ore is going down because everyone is panicked when the prices of steel futures fall suddenly from the peak, I believe the price of iron ore will stabilize by next week when the price of steel products and steel futures remain constant,' said the Beijing trader.

There were some bullish factors, as traders also talked of a possible supply slowdown from Australia following the recent cyclone, and although Port Headland had opened, there were reports that there were loading delays and queues at the port.

Added to this traders were wary, as in India on February 28 there will be a ruling on whether iron ore export duties will increase. However, not everyone was in agreement that prices would stabilize soon, with some pointing out that the price of iron ore still remained bearish in the short run.

'I was willing to pay $190 for a 63.5/63 Indian fines cargo yesterday, but not a single cent today, as the steel mills are shunning the spot market, many of them are reeling from the credit crunch in China today,' said the Beijing trader.

In the low-grade market there was talk that 58/58%-Fe cargo with 4% alumina and 5% silica had been sold at $163/dmt CFR North China, although sources also reported pressure on low-grade spot prices...

Spot prices of Q235 square billet stayed unchanged at Yuan 4,330/mt ($657) ex-stock while hot-rolled coil was down Yuan 50/mt at Yuan 4,870/mt ex-stock. On the Shanghai Futures exchange, the most active October rebar futures contract was down Yuan 60/mt at Yuan 4,940/mt.

'The price of many commodities futures suffered a huge dip today due to the instability in Libya, the steel futures are not spared either,' said a Shanghai trader."