Spot iron ore prices inched up
for the first time in eight weeks as several steel mills in China began to
rebuild inventories. But slower steel demand and high ore stocks at Chinese
ports are expected to cap gains.
Offers for Indian fines Fe
63.5/63 on Monday went up to reach $128-130/MT after shedding more than 30% since mid-September due to weakening steel demand in China, weighed
down by tight credit and global economic turmoil.
“Steel prices have started
to stabilize as the destocking continues. I expect iron ore prices to recover in
the next few weeks as mills look to replenish stocks. China's steel prices have
improved slightly, and as long as there is a pause in iron ore price declines,
buying will be kicking off quickly,” said an iron ore trader in eastern
China's Shandong province.
However, Some traders remained
concerned about the high level of stocks at Chinese ports and a flood of
shipments to the Chinese coast.
“The overhauls in some
Chinese regions are just the beginning, and we might see more production cuts
in coming weeks given by tepid demand in winter,” said the Chinese trader.
“The rise in spot prices
should be a technical rebound rather than an essential turnaround in
demand.”
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