SYDNEY Feb 10 Chinese iron ore futures jumped
more than 2 percent on Friday, nearly matching multi-year peaks,
lifted by news that January imports surged in a sign of a sharp
uptick in demand from steel mills as the world's second-biggest
economy picked up steam.
The upbeat sentiment was stoked by a year-on-year 12
percent rise in China's iron ore imports last month to 92
million tonnes, the second highest on record for any month,
despite an early Lunar New Year holiday.
"Steel mills moved quickly in early January to import more
ore before the New Year holiday and that pushed the number up
for the month," said Daniel Meng, an analyst at CLSA Materials &
Transportation Research. "While the holiday meant less imports
near the end of the month, net-net the impact was positive."
Meng cautioned that the high import figure released by the
General Administration of Customs also reflected a build-up of
inventories at Chinese ports, which could slow future shipments
into China. Larger steel mills in China prefer to maintain
stockpiles at around six weeks consumption, while smaller mills
keep inventories at three- to four-week levels, Meng said.
China's iron ore stocks at ports stood at a record high last
"The customs data was positive news that the market was
half-expecting, but it still had an effect," a commodities
trader in Perth, Australia said.
Investors in the iron ore market expect Chinese economic
data in the coming weeks to show the economy got off to a good
start in 2017, traders said. Investors were taking heart that
steady growth was giving the central bank room to slowly tighten
monetary policy and contain debt risk, they said.
Iron ore on the Dalian Commodity Exchange stood at
656 yuan ($95) a tonne after peaking earlier in the session at
661 yuan, just shy of January's three-year high of 666 yuan.
Major Australian iron ore exporter Rio Tinto
this week said it sees continued strong demand from
China, but warned another 40 million tonnes of additional global
supply could come on stream in 2017.
Three years ago, China was producing about 400 million
tonnes of ore but has since cut that annual figure to around 275
million, according to analysts' estimates.
The most active rebar on the Shanghai Futures Exchange
stood at 3,255 yuan a tonne, recoiling after climbing
as high as 3,273 yuan earlier in the day.
Imports of steel products fell 8.4 percent to 1.09 million
tonnes while exports fell 4.9 percent to 7.42 million tonnes,
the trade data showed.
($1 = 6.8770 Chinese yuan)
(Reporting by James Regan; Editing by Kenneth Maxwell)