Iron ore steady; China steel mill buying slow

By Ruby Lian and David Stanway
SHANGHAI, Jan 23 (Reuters) - Spot iron ore prices were
steady on Wednesday, with weak steel demand in top importer
China curbing gains from port shutdowns in Australia.
A tropical storm intensifying off Australia's northwest
coast brought nearly half of the world's iron ore trade to a
halt, idling huge ports used by miners Rio Tinto
and BHP Billiton .
The interruption at port operations is likely to support
prices of the steelmaking raw material even as Chinese steel
mills slowed down buying after building up stockpiles.
"Offers are still at high levels, but mills' buying interest
has faded, and I expect them to suspend buying next week ahead
of the Lunar New Year holiday," said a Shanghai-based iron ore
trader.
Iron ore with 62 percent iron content .IO62-CNI=SI, the
industry benchmark, stood unchanged at $145.90 a tonne on
Tuesday, according to data from the Steel Index.
Chinese steel market activities typically grind to a halt in
the two weeks before China's week-long Lunar New Year holiday,
which falls in mid-February this year.
Shanghai rebar prices were nearly flat on Wednesday amid
weak winter season demand, with cold temperatures in northern
regions forcing the suspension of construction activities.
"Steel futures have risen a lot on improving expectations on
demand and surging costs, while the physical market hasn't
caught up due to tepid (spot) demand," said a Shanghai-based
steel futures broker.
"Prices may not rise immediately after the Lunar New Year
holiday but prices should show upward trend as the economy
revives."
The most active rebar contract for May settlement on the
Shanghai Futures Exchange traded 0.13 percent higher by
midday break from Tuesday.
Shanghai rebar futures and iron ore indexes at 0343 GMT

Contract Last Change Pct Change
SHANGHAI REBAR* 3992 5.00 0.13

THE STEEL INDEX 62 PCT INDEX 145.9 0.00 0.00
METAL BULLETIN INDEX 148.07 2.81 1.93

*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day

(Editing by Tom Hogue)