Thursday, November 18,
Shanghai rebar futures regained some ground on Thursday after falling to three-week lows in the previous session, as Asian equities stabilized following recent losses.
The most active May rebar contract was up 0.8 percent at 4,588 Yuan per tonne by the midday break, off a high of 4,621 Yuan.
But weak steel demand during winter could limit further gains as two leading Chinese steel mills announced price cuts for December bookings, a week after pricing leader Baosteel kept prices for key products unchanged.
Recent losses in rebar futures pulled down iron ore forward swaps on Wednesday as investors locked in gains although spot prices remained firm on tight Indian supplies.
Offers to sell ore with 63.5 percent iron content were likely to slip to $165-$167 a tonne on Thursday, cost and freight, from as high as $169 earlier this week, an iron ore trader in Singapore said.
“I doubt there will be any bids as sentiment continues to weaken with the end of the year approaching,” he said, adding that strong domestic demand in India should support iron ore prices for the rest of the week.
“Steel mills have rebuilt big inventories after the national holiday, and now many are trying to buy some tonnages of special grade from the spot market, instead of booking big shipments overseas,” said an iron ore trader in Beijing, referring to the week-long Chinese break in early October.
“But most steel mills and traders are not expecting any big slump in iron ore prices in the longer term.”
The Steel Index iron ore benchmark stood at $163.20 a tonne on Wednesday, a new high since mid-May but nearly flat versus $163.10 on Tuesday.
In swaps, the Singapore Exchange-cleared December contract fell $2.85 to $156.60 a tonne and the January contract slid $3.60 to $154.90 a tonne.
Source: Reuters
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