Friday, December 24,
China mills curtail buying on uncertain price outlook.
India traders hope for $180/T C&F for 63.5 grades next week.
Swap market inactive on Christmas Eve.
Asian iron ore prices were stable on Friday as Chinese mills curtailed purchases, though Indian traders saw more upside on expectations that China may need to stock up in the weeks before the Lunar New Year holidays in February.
“There is no major bulk buying going on maybe because it is the end of the year,” said Ranjan Chhibba, an iron ore and coal trader in New Delhi. “But because of low availability, prices may stay firm.” Offers of Indian ore fines with 63.5 percent iron content held at $177-179 per tonne on Friday, CFR delivered to China, unchanged since the middle of this week, traders said.
“It could go up to $180 a tonne next week, but whether it is sustainable or not, will have to be seen,” said Dhruv Goel of trading firm SKTC in east India.
Two major iron ore indexes stayed at seven-month highs, but moved in different directions on Thursday, reflecting mixed views on the near-term market trend.
The Metal Bulletin Iron Ore rose 62 cents to $168.59 per tonne on Thursday, while the Steel Index 62 percent slipped to $170.7 per tonne.
TIGHT CAPITAL FOR STEEL MILLS
Many steel mills still aim to buy more stocks for holiday consumption, while the tightening capital crunch has curbed big purchases for materials already sitting at ports, traders in China said.
“Steel mills are facing a dilemma — they don’t have much money to buy spot materials, but they also don’t want to take the risk of importing materials at high prices, despite lower capital pressure in buying via letter of credit,” said an iron ore trader in Shanghai.
The iron ore swap market stayed inactive as it has been for most of this week with many traders on holidays, and is seen reviving only in the first week of January.
Source: Reuters
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