Buying interest from Chinese steel mills have not picked up
very well post Lunar holidays as many of them are waiting for clearer signs on
where prices are heading before boosting their stockpiles of the raw material.
The hesitation is largely caused by the poor outlook for steel
demand growth in China in a knock-on effect of its slowing economy, keeping
steel prices in check.
A tender by global miner BHP Billiton for MAC and Newman
iron ore fines that closes later on Tuesday should give the market a clearer
direction about prices, and some traders are expecting firm bids.
“I won't be surprised if the prices are slightly better
than index. After the holiday, some mills may be running low on their inventories
so they need to buy from the market,” said another Shanghai-based trader.
Rio Tinto , the world's second-biggest iron ore producer,
sold around 70,000 tonnes of 65-percent grade South African iron ore
concentrate at $151.5 a tonne, cost and freight, on Monday, around a dollar
more than a similar cargo in mid-January, just before the Lunar New Year
holiday, traders said.
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