Spot iron ore in China extends
gain supported by expectations of a rapid growing demand for steel in China from the construction
sector.
Shanghai Re-bar futures also rose
for a second session on Tuesday. The most-traded rebar contract on the Shanghai
Futures Exchange gained 0.3 percent to reach 4,828 yuan/MT.
China's crude steel output
reached 59.3 million tonnes in July versus a record 60.245 million tonnes in
May.
“In China 55 percent of
steel goes into infrastructure and construction, it is still at that stage of
urbanisation and industrialisation. There is still plenty of growth to
come.”, said a trader
Indian exporters quote Fe 63.5/63 at $186-187/MT and are unwilling to reduce quotes further due to short-supply or iron ore in the market. Whereas, quotes for Australian material were
steady, with Newman fines at $181-$183/MT
The strength in steel prices is
boosting demand for iron ore, the key ingredient in making steel, although some
mills are buying cautiously.
“Prices are still quite high
so unless it's necessary for mills to replenish their inventories, they would
choose to wait and see,” said a shipping manager for an iron ore trading
firm in Shanghai.
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