* Iron ore leaps almost 8 pct
* Boost from rise in China imports
* Highest price in three years
(Adds more analyst comment, updates prices)
By James Regan
SYDNEY, Feb 10 Chinese iron ore futures jumped
nearly 8 percent on Friday to their highest in three years,
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.
"Steel mills are making really good money. So that means
they can afford to pay for more iron ore," Lachlan Shaw, an
analyst with UBS in Melbourne, said.
Iron ore on the Dalian Commodity Exchange closed 7
percent higher at 688 yuan ($100) a tonne after peaking earlier
in the session at 694 yuan, the highest price in more than three
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
finished 2.75 percent higher at 3,328 yuan a tonne,
recoiling after climbing as high as 3,398 yuan earlier in the
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 = 6.8752 Chinese yuan)
(Reporting by James Regan; Additional reporting by Melanie
Burton in MELBOURNE; Editing by Kenneth Maxwell and Sunil Nair)