Spot iron ore in China is likely
to stretch gains this week as more mills in China return to the market to
replenish inventories, but an uncertain outlook for steel demand is expected to
cap the gains.
Iron ore, which fell more than 30
percent in October, began stabilizing last week, gaining more than 8 percent,
as Chinese demand picked up.
“There's more buying
interest from the mills, but some traders and miners are also holding off for
better prices,” said an iron ore trader in Shanghai, adding that some
Indian miners had canceled tenders last week at the last minute, hoping prices
would move higher this week.
Australian 61.5-percent grade
Pilbara iron ore fines increased by $1 to reach $125-$127/MT, and Indian
63.5/63 fines remained unchanged at $136-137/MT.
Anticipating further rise in spot
rates, prices of forward swaps extended recent gains. The Singapore
Exchange-cleared November contract rose $2.38 to $131/MT.
“The price rise will not be
so fast, Sentiment is cautiously optimistic. We still need to pay more
attention to steel demand in China which has not shown any significant change”,
said a Chinese trader.
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