Wednesday, January 05,
Spot iron ore prices in China were expected to remain well bid on Wednesday on expectations of firm demand from steelmakers as they boost stockpiles ahead of the Lunar New Year holiday next month.
Most of the three major iron ore indexes stayed near or touched new eight-month highs on Tuesday after rising more than 40 percent in 2010, buoyed by tight supplies and strong demand from top buyer China.
Chinese appetite for the steelmaking raw material is expected to stay strong this year although import growth may not be as brisk as in 2010 as Beijing works to contain money supply and credit rise to curb inflation that is running at a 28-month high.
The official China Securities Journal reported on Wednesday that the Chinese central bank is planning to begin this year a monthly review of banks’ reserve requirement as part of a wider monetary policy reform. [ID:nTOE704004]
Outside of China, market players were also keeping watch on floods in Australia and potential disruptions to exports from the world’s biggest iron ore miner.
Heavy rains in Australia’s Queensland have already hit the country’s $51 billion a year coal industry as several miners were forced to declare force majeure on coal contracts after disruptions to production and shipments.
Traders said Indian ore with 63.5 percent iron content were likely to remain offered between $177-$179 per tonne, including freight, levels last seen in May 2010.
Firmer steel prices were also aiding demand for iron ore.
The most active May rebar futures on the Shanghai Futures Exchange was off 0.2 percent at 0130 GMT after rising to their highest in more than seven weeks in the previous session.
Source: Reuters
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