* Dalian iron ore near upside limit, Shanghai rebar up 0.6 pct
* Lack of steel demand keeps lid on raw material buying - Sucden
(Adds trader comment on steelmakers hiking prices, updates prices)
By Manolo Serapio Jr
MANILA, Aug 5 Dalian iron ore futures jumped more than 3 percent on Wednesday,
supported by firmer steel prices that encouraged Chinese mills to chase some cargoes and kept
the spot benchmark near recent highs.
But the more modest gains in steel futures suggest prices may have peaked for now, with
demand in top consumer China remaining sluggish.
"We do caution that buying appetite is still weak as a lack of significant demand interest
in the steel market keeps a lid on demand for raw materials," Sucden Financial senior analyst
Kash Kamal said in a note to clients.
Iron ore for January delivery on the Dalian Commodity Exchange closed up 3.3
percent at 377 yuan ($61) a tonne. It touched a high of 378 yuan, just shy of the exchange-set
ceiling of 379.50 yuan.
The January rebar contract on the Shanghai Futures Exchange gained 0.6 percent to
end at 2,098 yuan a tonne, recoiling from this week's high of 2,132 yuan, a one-month peak.
Chinese steel prices rose from last weekend after recent steep losses that have forced some
mills to curb production.
China's steel consumption shrank nearly 5 percent in January-June, according to the China
Iron and Steel Association, and traders said the construction lull during the summer months
would keep prices low.
"Some traders and mills are trying to sell more as buying isn't as strong as the rally in
prices and they are worried that prices might have hit the ceiling at the moment," said a
Chinese steel trader.
Mills in Hebei, China's top steel producing province, let their agents in Beijing raise
prices for spot rebar to a minimum 2,050 yuan per tonne, pushing up the price by about 90 yuan
on Tuesday, according to The Steel Index (TSI).
Major Chinese steel producer Shagang Group has increased prices for rebar for the first 10
days of August, and other steelmakers have similarly lifted prices, said a Shanghai-based
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI slipped 0.5 percent
to $55 a tonne on Tuesday, based on TSI data, a day after jumping 4.5 percent.
The spot benchmark hit $55.30 on Monday, matching last week's peak, which was its highest
since July 2.
Rebar and iron ore prices at 0700 GMT
Contract Last Change Pct Change
SHFE REBAR JAN6 2098 +13.00 +0.62
DALIAN IRON ORE DCE DCIO JAN6 377 +12.00 +3.29
SGX IRON ORE FUTURES SEP 51.91 +0.85 +1.66
THE STEEL INDEX 62 PCT INDEX 55 -0.30 -0.54
METAL BULLETIN INDEX 55.29 -0.34 -0.61
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2097 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Additional reporting by Ruby Lian in Shanghai; Editing by
Subhranshu Sahu and Biju Dwarakanath)