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5 years ago
UPDATE 1-Iron ore holds near $150 as Chinese restocking slows
January 29, 2013 / 7:42 AM / 5 years ago

UPDATE 1-Iron ore holds near $150 as Chinese restocking slows

* Chinese mills may have adequate iron ore stocks
    * Shanghai rebar down slightly, but near 7-month top

 (Adds steel restocking, updates rebar price)
    By Manolo Serapio Jr
    SINGAPORE, Jan 29 (Reuters) - Spot iron ore prices steadied
as Chinese steel mills felt no pressure to further boost
stockpiles ahead of the Lunar New Year, limiting deals in the
physical market.
    Most steelmakers in China, the world's top iron ore
importer, may have adequate inventories of the raw material to
last them through the week-long holiday in February, traders
said. 
    Iron ore prices hit a 15-month high of close to $160 per
tonne earlier this month, reflecting restocking efforts that
began in December.
    "Some small- to medium-sized mills are still looking for
reasonably priced cargo, but most are done with stocking up for
the Chinese New Year," said an iron ore trader in the port city
of Rizhao in China's eastern Shandong province.
    Many mills have iron ore inventories that are good for at
least 20 days of use, which may be enough until the end of next
month, he said.
    Iron ore with 62 percent iron content, the industry
benchmark, stood at $148.40 a tonne on Monday, little changed
from $148.60 on Friday, based on data from Steel Index. 
    Price offers for most imported iron ore cargoes in China
were steady on Tuesday, according to Chinese consultancy Umetal.
But Brazilian cargoes were being offered at $1 per tonne higher
amid limited shipments recently from the rain-hit key supplier.
    Those keen on buying immediate cargoes may opt for iron ore
lying in Chinese ports, although it would be difficult to find
cargo trains to transport them as the Lunar New Year approaches,
with railways clogged by passenger trains, said a trader in
Shanghai.
    "If they buy now they will have to pay for storage to keep
the iron ore in the ports, so they might as well wait until
after the holiday," he said.
    A dull Chinese steel market is also a disincentive. The
price of steel billet in China's key Tangshan area has been
steady at above 3,200 yuan ($510) per tonne since Friday, and
Shanghai rebar futures are likewise flat.
    The most briskly traded rebar contract for May delivery on
the Shanghai Futures Exchange closed unchanged at 4,069
yuan per tonne. But rebar remains near Friday's session peak of
4,085 yuan, which was a seven-month high.
    Some traders are hoping steel demand in China will pick up
pace when construction and manufacturing activities ramp up
after the Lunar New Year holiday, prompting a restocking of
steel products.
    "Business is good these days. We can see about 2,000 tonnes
of steel products coming in everyday as traders are building up
stocks ahead of the holiday. Stocks of similar volume flow out
to end-users too," said an official in a major steel warehousing
zone in Wuxi, 120 km (75 miles) northwest of Shanghai.
 
          
  Shanghai rebar futures and iron ore indexes at 0719 GMT
                                                                              
  Contract                          Last    Change   Pct Change
  SHFE REBAR MAY3                   4069     +0.00        +0.00
  THE STEEL INDEX 62 PCT INDEX     148.4     -0.20        -0.13
  METAL BULLETIN INDEX            149.58     +0.06        +0.04
                                                                              
  Rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 ($1=6.2226 Chinese yuan)

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

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