Friday, July 08,
Spot iron ore prices in China gained momentum on Friday with Shanghai steel futures touching three-week highs
The October rebar contract on the Shanghai Futures Exchange reached as high as 4,828 yuan per tonne, its highest since June 13 and its best weekly gain since early April.
Higher steel prices usually provoke traders and steel mills to stock more iron ore. So, a rise in rebar futures have infused some buying interest in the market and quotes for spot iron ore have moved up.
Fe 63.5/63 of India cargo is heard being quoted at $179-$181/MT i.e. back to the levels seen in mid-June
“I think the buying interest is coming only from traders who are taking positions on expectations that prices will continue to rise. Steel mills are still hesitant to procure iron ore in larger quantities as they do not want to build up too much of inventory” said a trader based in China.
In the forward swaps market, the Singapore Exchange-cleared July and August contracts both dropped by more than a dollar to reach $169.75 and $167.83/MT respectively, reflecting that the recent gains in spot iron ore prices may not be sustainable.
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