Friday, 22nd July,
Higher steel prices in Shanghai, China helped boost demand for iron ore, although traders said some Chinese mills are more keen on buying lower-grade material. Shanghai rebar futures edged up on Friday and are set to extend their winning streak to a third consecutive week on brisk construction demand in top steel producer China.
According to a trader in Beijing “Iron ore prices may remain firm next week as steel prices will continue to edge up amid construction activities as Rebar and wire rod producers are enjoying high profit margins and I don’t expect iron ore prices to fall easily “
Quotes for Indian 63.5/63 ore were unchanged at $182-$184 from yesterday. Offers for 62-grade Newman fines from Australia were steady at $179-$181 a tonne, with freight, on Friday.
“It’s difficult to push the price up strongly because the mills have been quite selective on the grade, they are now more interested in low-grade fines at 52-55 (iron content) which they tend to mix with high-grade fines that they get from long-term contracts.” said a shipping manager for an iron ore trading firm in Shanghai.
Traders said global miner BHP Billiton sold 90,000 tonnes 62.5-grade Newman fines at $180 a tonne, cost and freight, and another 80,000 tonnes of 61.5-grade MAC fines at $174 a tonne, in line with market expectations.
Hopes are high that China’s demand for steel and iron ore will strengthen further amid a busier construction sector and optimism that Beijing may relax credit restrictions in the second half of the year.
“Some mills are expecting China to lift some restrictions on credit control so the liquidity situation might be better in the second half,” said the Shanghai trader, but added it was not clear how the credit curbs may be eased.
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