Spot Iron ore in China extends gain after more than a week of losses as falling prices encouraged some
steel mills in China to return to the market. However, sluggish steel demand in China may limit the recovery seen at present.
Offer for imported iron ore in
China rose for a second day on Friday as traders and miners raised their rates
with inquiries picking up. Indian fines Fe 63.5/63 reached $144-$146/MT. Whereas,
Australian Pilbara iron ore fines were quoted at $134-$136/MT C&F i.e. up
by $2 from Thursday while Newman fines
also rose by $2 to reach $138-$140/MT.
Iron ore forward swaps also witnessed
a steep rise in prices on Thursday reflecting market expectations for a further
increase in spot rates, with all contracts rising by as much as $8/MT.
“Some steel mills have
started buying ore marginally which could support iron ore prices for a while,
but it will be a weak rebound because fundamentally, steel demand remains
weak,” said Henry Liu, head of commodity research at Mirae Asset
Securities in Hong Kong
It still remains to be seen
whether China's move to cut bank reserve requirements would boost liquidity
enough to benefit steel mills faced with tight loan access and poor steel demand,
he added.
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