Iron ore prices in the physical market turned higher this
week after hitting six-week lows. Imported Iron ore offers in China have moved
up by $1-$2 per tonne on Thursday as traders began picking up cargoes for
delivery over the next two months on expectations demand from top buyer China
will recover.
Hopes are growing that China's economy will be in better
shape in the first half of 2013 as its new leader who takes over in March
sustains pro-growth policies, boding well for demand in the world's biggest
steel consumer.
“What we're looking at now in the physical market (are
cargoes) to be delivered mid-January to mid-February. So you've got a few
traders taking some position cargoes ahead of the Chinese New Year,” said
an iron ore broker at Freight Investor Services (FIS).
“While sentiment on December delivery was bearish,
we're now looking at Jan-Feb delivery so the sentiment's better. There's always
an expectation that you'll get a bit of a price spike after the Chinese New
Year, so same anticipation this time around.”
A fall in Chinese steel prices this month to levels last
seen in September prompted iron ore buyers to limit spot purchases. That pushed
down the price of benchmark 62-percent grade iron ore to$115.30
per tonne on Monday, its lowest since Oct. 19.
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