October 15, 2015 / 7:28 AM / 2 years ago

UPDATE 1-Iron ore at 1-week low as weak China steel drags

* Shanghai rebar languishes near all-time low
    * BHP sees sustained downward pressure on iron ore prices
    * Fortescue eyes deeper cut in production cost

 (Adds Fortescue, updates prices)
    By Manolo Serapio Jr
    MANILA, Oct 15 (Reuters) - Spot iron ore prices fell to
one-week lows and futures in China retreated on Thursday,
reflecting weak sentiment amid a lack of signals that near-term
demand from the world's top steel consumer would pick up.
    BHP Billiton, the world's No. 3 iron ore producer,
expects more low-cost supply from Australia and Brazil for the
remainder of the year that should continue to put prices under
    "Fundamentals are weak, steel prices aren't really picking
up, they're at poor levels. There's no reason for the market to
spike," said an iron ore trader in Shanghai, on the outlook for
the steelmaking ingredient.
    Iron ore for immediate delivery to China's Tianjin port
.IO62-CNI=SI fell 1.1 percent to $54.30 a tonne on Wednesday,
according to The Steel Index (TSI).
    On Monday, the spot benchmark touched a two-week top of
$55.70, soon after China returned from the Oct. 1-7 National Day
    Bids for spot iron ore cargoes were low and slow, traders
said, as weak steel pricing forces Chinese mills to limit
stockpiles of the raw material.
    China's steel demand has been shrinking in the face of a
slowing economy, prompting more producers to sell overseas. In
September, China's steel exports reached a record high of 11.25
million tonnes.
    Prices for imported iron ore cargoes stockpiled at major
ports in China slipped by 5 yuan per tonne, TSI said.
    As prices continue to drop, Australia's Fortescue Metals
Group, the world's fourth-biggest iron ore miner, is
cutting costs more deeply. Chief Executive Nev Power said
production cost should average around $15 per wet tonne of iron
ore by year-end, compared with the $18 goal set in July.
    The most-traded January iron ore contract on the Dalian
Commodity Exchange closed 0.7 percent lower at 374.50
yuan ($59) a tonne.
    January rebar on the Shanghai Futures Exchange 
ended flat at 1,834 yuan a tonne, not far above the 1,815 yuan
trough it touched on Sept. 30 which was the lowest for a
most-active contract since the bourse launched rebar futures in
  Rebar and iron ore prices at 0703 GMT
  Contract                          Last    Change   Pct Change
  SHFE REBAR JAN6                   1834     +1.00        +0.05
  DALIAN IRON ORE DCE DCIO JAN6    374.5     -2.50        -0.66
  SGX IRON ORE FUTURES JAN         46.88     +0.10        +0.21
  THE STEEL INDEX 62 PCT INDEX      54.3     -0.60        -1.09
  METAL BULLETIN INDEX             55.12     +0.15        +0.27
  Dalian iron ore and Shanghai rebar in yuan/tonne
 Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.3454 Chinese yuan)    

 (Reporting by Manolo Serapio Jr.; Editing by Richard Pullin and
Gopakumar Warrier)

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