Spot iron ore in China inched up further
as steel mills continued to replenish inventories after prices slumped more
than 30 percent last month. The Shanghai steel futures also rose for a third
time in four sessions on Wednesday after the Chinese inflation data suggested that
there is room for Beijing to relax its monetary policy, a move that may revive
demand.
Offers for Fe 63.5/63 moved up to
reach $138-140/MT. However, exporters are not holding much cargo on port. Australian
63-grade Newman fines have also increased to reach $137/MT and Fe 61.5-grade
MAC fines were also quoted a dollar higher at $127 to $129/MT.
“As inflationary pressures
have been contained, that could give the central bank more leeway to relax its
monetary policy and there is a possibility for the PBoC (China's central bank)
to cut the reserve requirement ratio in the rest of the year,” said Wang
Jin, analyst at Guotai Junan Securities in Shanghai.
The most-traded May rebar
contract on the Shanghai Futures Exchange rose 0.6 percent to 4,164 yuan a
tonne by the midday break. Rebar has gained 1 percent so far this week after
dropping 1.4 percent last week.
Prices of iron ore forward swaps
cleared by the Singapore Exchange extended recent gains, underscoring investor
expectations that spot rates can recover further ground in the near term.
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