Wed Oct 12, 2011
* China mills seen cutting steel production
* Baosteel says to keep prices unchanged
By Manolo Serapio Jr
SINGAPORE, Oct 12 (Reuters) - Benchmark China steel futures fell to their lowest ever on Wednesday as weaker demand put further pressure on prices and will likely curb output in the world's top consumer and producer.
Baoshan Iron and Steel , China's biggest listed steelmaker, said it will keep prices of its main products unchanged next month after raising them in September and October, reflecting caution amid slower domestic appetite.
The most briskly traded January rebar contract on the Shanghai Futures Exchange fell as low as 4,255 yuan a tonne, the weakest level for the contract. By 0307 GMT, it was down 0.2 percent at 4,315 yuan.
Rebar, used in construction, dropped more than 11 percent in September, its biggest monthly loss ever, as tighter credit in China thinned demand for steel and a construction boom that fuelled a record production pace earlier in the year lost steam.
"We are going to see some production cuts definitely with steel prices at these levels. Some mills, especially the marginal producers, are not making money anymore," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.
"Sentiment is quite bearish. We have not yet seen the bottom of the steel market."
China's average daily crude steel output declined 2.3 percent to 1.919 million tonnes in mid-September from the previous 10 days, industry data showed last month.
Prices of iron ore, the key component in making steel, may continue to fall if No. 1 buyer China cuts steel output.
Index-based spot iron ore prices, based on Chinese transactions and used by global miners in fixing supply contracts, slid on Tuesday to their lowest since March.
Iron ore with 62 percent iron content fell 1.3 percent to $164.40 a tonne, according to the Steel Index .IO62-CNI=SI and was down 1 percent at $165.25 based on Platts IODBZ00-PLT.
Metal Bulletin's similar gauge .IO62-CNO=MB dropped 1.3 percent to $165.26.
Prices of forward swaps <0#SGXIOS:> also extended losses, with the Singapore Exchange-cleared October contract down $2.58 to $161.67 a tonne and November falling more than $4 to $154.17, as buyers bet on a further decline in spot rates.
"I'm not confident about the market. There will be much less demand in winter because most construction activities will stop," said a Shanghai-based iron ore trader.
But the trader said cuts in China's steel output, if done aggressively, may allow prices to recover as mills rely on product inventories, tightening supply.
"That can help balance the market and boost demand again for iron ore," he said."
(sourced Reuters)
Showing posts with label steel futures. Show all posts
Showing posts with label steel futures. Show all posts
Wednesday, October 12, 2011
Saturday, August 20, 2011
Iron Ore-Shanghai rebar hits 1-week low, ore prices steady
Saturday, 20 August 2011
China steel futures slipped to one-week lows on Friday, tracking losses in equities fed by fears the United States may be courting another recession and an unresolved debt
crisis in Europe, although firm demand hopes capped losses.
A drop in factory activity in the U.S. Mid-Atlantic region to the lowest level since March 2009 coupled with the debt crisis in the euro zone, dragged down Asian stocks, with South Korea's benchmark shedding 5 percent and Chinese stocks down 1.3 percent.
The most-active January rebar contract on the Shanghai Futures Exchange hit a low of 4,790 yuan per tonne on Friday, its weakest since Aug. 11. It closed down 0.3 percent at 4,814 yuan.
China's daily steel output has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year, as Chinese mills made more steel to keep up with strong demand from the construction sector.
That has supported demand for iron ore, the key ingredient to produce steel.
"The recent rout in global markets has not had any adverse impact on iron ore prices as expectations for strong demand as well as supply tightness have supported price offers," said an iron ore trader in Beijing.
Offers for India's 63.5/63 grade iron ore remained high at $188-$189 a tonne, including freight, on Friday, traders said.
Australia's No. 3 iron ore miner, Fortescue Metals Group , said tighter credit in China was moderating iron ore demand, but underlying demand remained intact.
Fortescue is one of several iron ore miners in Australia pushing up production to meet strong Asian demand for iron ore, particularly from top importer China.
Global price indexes, based on spot deals in China and which miners use as a gauge in setting contract rates, extended gains on Thursday.
Iron ore with 62-percent iron content gained 30 cents to $177.10 a tonne, according to The Steel Index .IO62-CNI=SI, and rose 24 cents to $177.29 a tonne based on Metal Bulletin's index .IO62-CNO=MB.
Platts 62-percent gauge IODBZ00-PLT edged up 25 cents to $178.75 a tonne.
Prices of iron ore swaps sustained recent gains, with nearby contracts rising for a fourth straight session on Thursday, suggesting buyers remain optimistic the strength in spot prices can continue.
In industry news, South Korea's POSCO , the world's third-biggest steelmaker, said that one of its blast furnaces in the southwestern city of Gwangyang was on fire, but no production disruptions had been reported.
"I don't expect this will affect iron ore prices as Japan and South Korea have long-term supply contracts with suppliers and are not likely to delay shipments due to this small accident," said another iron ore trader in Beijing.
Source: Reuters
China steel futures slipped to one-week lows on Friday, tracking losses in equities fed by fears the United States may be courting another recession and an unresolved debt
crisis in Europe, although firm demand hopes capped losses.
A drop in factory activity in the U.S. Mid-Atlantic region to the lowest level since March 2009 coupled with the debt crisis in the euro zone, dragged down Asian stocks, with South Korea's benchmark shedding 5 percent and Chinese stocks down 1.3 percent.
The most-active January rebar contract on the Shanghai Futures Exchange hit a low of 4,790 yuan per tonne on Friday, its weakest since Aug. 11. It closed down 0.3 percent at 4,814 yuan.
China's daily steel output has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year, as Chinese mills made more steel to keep up with strong demand from the construction sector.
That has supported demand for iron ore, the key ingredient to produce steel.
"The recent rout in global markets has not had any adverse impact on iron ore prices as expectations for strong demand as well as supply tightness have supported price offers," said an iron ore trader in Beijing.
Offers for India's 63.5/63 grade iron ore remained high at $188-$189 a tonne, including freight, on Friday, traders said.
Australia's No. 3 iron ore miner, Fortescue Metals Group , said tighter credit in China was moderating iron ore demand, but underlying demand remained intact.
Fortescue is one of several iron ore miners in Australia pushing up production to meet strong Asian demand for iron ore, particularly from top importer China.
Global price indexes, based on spot deals in China and which miners use as a gauge in setting contract rates, extended gains on Thursday.
Iron ore with 62-percent iron content gained 30 cents to $177.10 a tonne, according to The Steel Index .IO62-CNI=SI, and rose 24 cents to $177.29 a tonne based on Metal Bulletin's index .IO62-CNO=MB.
Platts 62-percent gauge IODBZ00-PLT edged up 25 cents to $178.75 a tonne.
Prices of iron ore swaps sustained recent gains, with nearby contracts rising for a fourth straight session on Thursday, suggesting buyers remain optimistic the strength in spot prices can continue.
In industry news, South Korea's POSCO , the world's third-biggest steelmaker, said that one of its blast furnaces in the southwestern city of Gwangyang was on fire, but no production disruptions had been reported.
"I don't expect this will affect iron ore prices as Japan and South Korea have long-term supply contracts with suppliers and are not likely to delay shipments due to this small accident," said another iron ore trader in Beijing.
Source: Reuters
Wednesday, January 26, 2011
Steel futures at SHFE post record gains in pre holiday period
Wednesday, 26 Jan 2011
Bloomberg reported that steel futures in Shanghai jumped to a record with buyers in China stockpiling the raw material in anticipation of a shortfall in supplies.
Rebars futures, on the Shanghai Futures Exchange, for October delivery gained for a third day rising as much as by 2.6% to CNY 5,093 per tonne, the highest ever. The contract was at CNY 5,077 per tonne at the 11:30 AM break, up by 5.5% this month.
The May delivery wire rod contract rose by 2.7% to CNY 4,909 per tonne.
Rebar inventories monitored by the Shanghai Futures Exchange fell to 17,259 tonnes last week, the lowest since August 2009.
Mr Huang Huiwen analyst with China International Futures (Shanghai) Co said “Raw material prices continue to support steel prices. Iron ore supplies may further tighten as Chinese steel demand and production picks up.”
He said “The strength in raw material prices should ensure the continued upward momentum of steel prices.”
But Mr Huang cautioned that “The biggest risk to the market lies in China’s moves to rein in liquidity and property speculation.”
China’s central bank on Jan. 14 ordered lenders to hold more deposits as reserves for the fourth time in two months, adding to last year’s policy tightening measures by the government that included two interest-rate increases. Other steps since April include curbing loans for third-home purchases, increasing down-payment requirements and raising mortgage rates.
China boosted steel output by 9.3% to a record in 2010 to reach about 627 million tonnes and as per some analysts would rise to 661 million tonnes in 2011. (sourced:Bloomberg)
Bloomberg reported that steel futures in Shanghai jumped to a record with buyers in China stockpiling the raw material in anticipation of a shortfall in supplies.
Rebars futures, on the Shanghai Futures Exchange, for October delivery gained for a third day rising as much as by 2.6% to CNY 5,093 per tonne, the highest ever. The contract was at CNY 5,077 per tonne at the 11:30 AM break, up by 5.5% this month.
The May delivery wire rod contract rose by 2.7% to CNY 4,909 per tonne.
Rebar inventories monitored by the Shanghai Futures Exchange fell to 17,259 tonnes last week, the lowest since August 2009.
Mr Huang Huiwen analyst with China International Futures (Shanghai) Co said “Raw material prices continue to support steel prices. Iron ore supplies may further tighten as Chinese steel demand and production picks up.”
He said “The strength in raw material prices should ensure the continued upward momentum of steel prices.”
But Mr Huang cautioned that “The biggest risk to the market lies in China’s moves to rein in liquidity and property speculation.”
China’s central bank on Jan. 14 ordered lenders to hold more deposits as reserves for the fourth time in two months, adding to last year’s policy tightening measures by the government that included two interest-rate increases. Other steps since April include curbing loans for third-home purchases, increasing down-payment requirements and raising mortgage rates.
China boosted steel output by 9.3% to a record in 2010 to reach about 627 million tonnes and as per some analysts would rise to 661 million tonnes in 2011. (sourced:Bloomberg)
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