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Iron Ore-Spot prices stabilise, low-grade cargoes sought
March 20, 2012 / 4:27 AM / 6 years ago

Iron Ore-Spot prices stabilise, low-grade cargoes sought

* BHP Billiton sees China ore demand flattening
    * Rio Tinto says iron ore expansion plan on track
    * Shanghai rebar falls for third time in 5 sessions

 (Updates rebar price)	
    By Manolo Serapio Jr	
    SINGAPORE, March 20 (Reuters) - Spot iron ore prices
steadied on Tuesday as demand from top buyer China cooled after
last week's run-up, with some steel mills opting for cheaper,
lower-grade cargoes to manage costs while the outlook for steel
demand remains blurry.	
    Offer prices for imported iron ore in China were mostly
unchanged from Monday, with top miner Vale selling
175,000 tonnes of 65-percent grade Carajas fines via a tender at
$158 a tonne, cost and freight, about the same price as a
previous deal, traders said.	
    Iron ore with 62 percent iron content .IO62-CNI=SI was
unchanged at $144.70 a tonne on Monday, according to Steel
Index, after hitting a near four-month high of $145 on Thursday.	
    "Buyers are a bit more cautious about Australian and
Brazilian cargoes and we have a lot of clients asking for
low-grade fines," said a Shanghai-based iron ore trader.	
    Those lower-grade cargoes, or ore with iron content of less
than 60 percent, are usually offered by India. To trim costs,
some Chinese mills normally mix lower-grade ore with domestic
ore concentrate in producing steel, the trader said.	
    Apart from Vale's, there are fewer new cargoes in the
market, with Australian miners only resuming loading recently
after ports there were shut ahead of the weekend cyclone.	
    "The cyclone disrupted the flow of shipments from BHP, but
most of the vessels have resumed loading and all looks good,"
said a trader in Hong Kong.	
    BHP Billiton , the world's third-biggest
iron ore producer, is pushing ahead with its $10 billion 
expansion plan even as it sees signs that demand for the raw
material from China is flattening. 	
    Second-ranked Rio Tinto  said its plans to
expand production were well advanced for completion next year
despite concerns over cooling demand in China. 	
    China is seeing slower growth in crude steel output this
year, an increase of 7 percent to 730 million tonnes versus 2011
growth of 8.9 percent, with some steel mills predicting real
demand could remain flat and warning of further losses as
Beijing persistently deals with overcapacity.	
    Iron ore prices are 20 percent off September highs as
liquidity curbs and a tighter property market in China kept
Chinese appetite for the steel raw material in check.	
    Chinese Premier Wen Jiabao said last week he would keep
property tightening measures in place during his last year in
office to deflate asset bubbles and shield the economy.	
    The most-active October rebar contract on the Shanghai
Futures Exchange slipped 0.2 percent to 4,333 yuan
($690) a tonne at the close, falling for a third time in five
sessions.	
      	
  Shanghai rebar futures and iron ore indexes at 0708 GMT
                                                                              
  Contract                          Last    Change  Pct Change
  SHANGHAI REBAR*                   4333    -10.00       -0.23
  PLATTS 62 PCT INDEX                147      0.00        0.00
  THE STEEL INDEX 62 PCT INDEX     144.7      0.00        0.00
  METAL BULLETIN INDEX            144.93     -0.63       -0.43
                                                                              
  *In yuan/tonne
  #Index in dollars/tonne, show close for the previous trading day
      	
($1 = 6.3233 Chinese yuan)	
	
 (Reporting by Manolo Serapio Jr.)

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