November 8, 2012 / 4:47 AM / 5 years ago

Iron ore at 3-month high on China policy hopes

* Firm prices at tenders lift iron ore, traders positioning
    * China daily steel output slips in late October -CISA

    By Manolo Serapio Jr
    SINGAPORE, Nov 8 (Reuters) - Iron ore rose to its highest in
more than three months and traders upped offers on Thursday for
cargoes for sale to top buyer China, hoping to sustain what has
been a gradual increase in prices, with steel demand largely
stable.
    Market participants were also keeping tabs on the opening of
China's party congress that will usher in a once-in-a-decade
leadership change, where they hope more pro-growth measures will
be launched.
    Price offers for imported iron ore cargoes in China rose by
$2 to $3 per tonne on Thursday, traders said, after sale tenders
the previous day were concluded at higher prices.
    Benchmark iron ore with 62 percent iron content
.IO62-CNI=SI rose 0.4 percent to $121.60 a tonne on Wednesday,
its highest since July 24, based on data from Steel Index. That
marked a third straight day of price gains for the steelmaking
ingredient.
    "Most takers of cargoes are traders who are trying to keep
the market up, expecting some good news for the steel sector to
come out from the China congress," said a Shanghai-based iron
ore trader.
    "There's still demand from mills, but unless they really
need the material urgently, they are not really willing to pay
higher prices, especially for forward cargo."
    A big cargo of Australian 61.5-percent grade Pilbara iron
ore fines was sold on Wednesday to a Singapore-based trading
firm at $123.01 per tonne, a dollar more than a previous deal
for the same grade, the Shanghai trader said.
    "Some traders with cargoes in hand are holding offers in
anticipation of firmer prices, though in general there is little
consensus on direction, particularly among mills," Steel Index
said in a note.
    Top iron ore miner Vale is selling another
170,000 tonnes of 65-percent grade cargo at a tender on
Thursday, while Rio Tinto  is offering 75,000
tonnes of South African iron ore concentrate, traders said.
    Largely stable steel prices in China and expectations that
more measures to stimulate steel demand and the overall economy
will be unveiled by China's new leaders have supported recent
gains in iron ore prices.
    China's outgoing President Hu Jintao warned that corruption
threatened the ruling Communist Party and the state, promising
political reform as he formally opened the party congress in
Beijing. 
    The most traded rebar contract for May delivery on the
Shanghai Futures Exchange was off 0.3 percent at 3,624
yuan ($580) a tonne, but staying near 3,600 yuan where it has
been since early October.
    But the inability of steel prices to scale higher may have
prompted China's leading steel mills to cut daily crude steel
output late last month.
    China's average daily crude steel output fell 4 percent to
1.926 million tonnes between Oct. 21-31 from the preceding
10-day period, according to data from the China Iron and Steel
Association. 
        
  Shanghai rebar futures and iron ore indexes at 0422 GMT
                                                                                                               
  Contract                          Last    Change   Pct Change
  SHFE REBAR MAY3                   3624    -10.00        -0.28
  PLATTS 62 PCT INDEX                123     +1.25        +1.03
  THE STEEL INDEX 62 PCT INDEX     121.6     +0.50        +0.41
  METAL BULLETIN INDEX            121.95     +0.46        +0.38
                                                                                                               
  Rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
      
($1=6.2437 Chinese yuan)

 (Reporting by Manolo Serapio Jr.; Editing by Clarence
Fernandez)

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