Spot iron ore holds near 5 month low
Reuters reported that spot iron ore prices stayed near their weakest level in more than five months, reflecting slow demand from top importer China where steel mills are in no rush to snap up cargoes amid a soft market.
Chinese iron ore futures bounced back slightly after plumbing a fresh contract low and Shanghai steel edged up but not far above a record trough reached last week.
According to data compiled by Steel Index, ore with 62% iron content for immediate delivery to China .IO62-CNI=SI was little changed at USD 130.90 a tonne on Monday versus Friday's USD 130.70, its weakest level since August 5.
High stockpiles of iron ore at Chinese ports after recent brisk shipments show there is limited appetite for the raw material among mills. Inventories of imported iron ore at major Chinese ports stood at 91.4 million tonnes last week, up more than 2 million tonnes from the previous week, based on data from industry consultancy Mysteel.
Chinese mills have in past years restocked heavily on iron ore ahead of the week long Lunar New Year break, sending spot prices to near USD 160 in January last year ahead of the holiday that fell in February. But traders say the appetite is more limited this year ahead of the holiday that begins on January 31st 2014.
An iron ore trader in Shanghai said that there is still some restocking going on, but people are buying in small volumes of 5,000 tonnes to 10,000 tonnes. Persistently high borrowing costs, lower winter construction demand, nervousness over property market changes and the upcoming Chinese holidays are reducing demand for steel and iron ore in China, the world's biggest consumer of the commodities.
China's interbank rates have eased from recent highs although banks remain uneasy with the approaching Lunar New Year holiday which puts massive pressure on cash supply.
The most-traded rebar contract for May delivery on the Shanghai Futures Exchange was up 0.5% at CNY 3,487 per tonne by midday. It touched a record low of CNY 3,441 on Friday amid weak demand for the construction steel product.
(www.steelguru.com)
Wednesday, January 15, 2014
Spot iron ore prices
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