Wednesday, December 15,
Prices of imported iron ore in China stabilized on Wednesday near levels last seen in May on firm offers, though trade was thin as some steelmakers had difficulty accessing credit.
Tight supplies from India, the world’s third-largest iron ore exporter, had boosted demand for raw material from top miner Australia and was also encouraging suppliers from the Middle East and Africa to boost shipments to China, traders said.
Indian ore with 63.5 percent iron content was being offered at $173-$175 a tonne, cost and freight, for a third day on Wednesday,
Chinese steel mills usually find it difficult securing loans to fund iron ore purchases during the end of the year, and recent moves by the Chinese central bank to increase reserve requirements for banks has further limited the amount of money circulating in the market. Cash reserve ratios for banks have been lifted three times since November, with the latest announced last Friday.
Some Chinese mills continue to buy iron ore in anticipation of further price increases next year when the country’s crude steel output is expected to hit another record level.
The Steel Index 62 percent iron ore benchmark rose 60 cents to $167.50 a tonne, C&F, on Tuesday. Prices for iron ore forward swaps continued to top the indices, indicating investors’ bullish outlook.
The January contract, cleared by the Singapore Exchange, rose $1.62 to $172.12 a tonne and the February contract climbed $1.38 to $171.00.
Demand from China is expected to stay strong through to Chinese New Year, a usual restocking period for steel mills, said Michael Gaylard, strategy director at Freight Investor Services in Shanghai.
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