May 11, 2018 / 3:02 AM / 2 months ago

China's iron ore, steel rise on hopes of higher demand

BEIJING, May 11 (Reuters) - China’s iron and steel prices rose on Friday amid growing optimism about demand as inventories of rebar used in construction continued to fall and demand from the real estate market strengthened.

* “Chinese steel demand continues to beat expectations. Real estate investment and housing starts are picking up, while infrastructure spending remains elevated,” said ANZ in a research note.

* “After some restocking in late March ahead of a key maintenance period, the scene is set for steel mills to re-enter the market.”

* Stockpiles of steel rebar SH-TOT-RBARINV have fallen almost a third since mid-March, when inventories were at a multi-year peak at 9.79 million tonnes, dropping to 6.71 million tonnes as of May 4, data compiled by SteelHome consultancy showed.

* At 10:35 a.m. (0235 GMT), the most-active construction rebar futures on the Shanghai Futures Exchange were up 1.7 percent at 3,653 yuan ($575.73) a tonne.

* Iron ore futures on the Dalian Commodity Exchange rose 0.8 percent to 473.5 yuan a tonne.

* Steelmaking raw materials have been boosted by hopes of restocking by mills amid expectations of higher production after a prolonged winter.

* The outlook for iron ore has picked up in recent weeks, ANZ said, citing recent Chinese economic data.

* The bank said an expected surplus in 2018 has all but evaporated, as it maintained its view that prices have limited downside. It expected prices to push back towards $69 per tonne over the next few months.

* A prolonged mine outage in Brazil and falling exports from India and Sierra Leone will also cut supplies, it said.

* Iron ore for delivery to China closed at $66.83 .IO62-CNO=MB on Thursday. ($1 = 6.3442 Chinese yuan renminbi) (Reporting by Josephine Mason; editing by Richard Pullin)

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