by 2015, when global economic recovery spurs i, page-2

Reuters article below in short stockpiles at ports declining, increased investment more ore in demand


(Corrects day in first paragraph to Tuesday)
* Dalian iron ore futures at 6-wk high, spot ore at 1-wk top
* China steel inventories have dropped almost 2 mln T in 5
weeks

By Manolo Serapio Jr
SINGAPORE, April 8 (Reuters) - Shanghai steel rebar futures
hit one-month peaks on Tuesday as investors bid up prices after
a holiday weekend amid optimism over the outlook for demand
after a sustained drop in Chinese stockpiles since the start of
March.
Inventory of trader-held steel products in China, the
world's biggest consumer, has fallen by nearly 2 million tonnes
in the past five weeks, reflecting firmer demand. Consumption
may strengthen further through May when demand for steel usually
increases along with brisk construction activity.
The most-traded rebar for October delivery on the Shanghai
Futures Exchange hit a high of 3,406 yuan ($550) a
tonne, its loftiest since March 7. It was up 1.3 percent at
3,397 yuan by 0229 GMT.
The most-active September iron ore contract on the Dalian
Commodity Exchange rose 2.5 percent to 820 yuan per
tonne, after peaking earlier at 824 yuan, its highest since Feb.
24.
Stockpiles of five major steel products fell to 18.67
million tonnes as of April 4 from 19.27 million tonnes the
previous week, data from industry consultancy Mysteel showed.
They have dropped continuously since the end of February when
they stood at 20.33 million tonnes.
Stocks of rebar, a construction steel product that accounts
for bulk of the inventory, stood at 9.34 million tonnes last
week, down from 10.42 million tonnes at end-February, the data
showed.
"Market participants are anticipating that consumption will
rise further in April and May, and the government is also trying
to stimulate the economy in the short term," said Zhou Ting,
analyst at Jinrui Futures in Shenzhen.
Beijing has fast-tracked spending on railways and other
projects in the country's poorer regions and also cut taxes for
small businesses in a bid to prop up a slowing economy.
The plan is to add at least 6,600 kilometres of railway
lines this year, 1,000 kilometres more than last year, at a cost
of $24 billion. That should benefit the steel sector and help
sustain gains in iron ore, said Morgan Stanley which sees the
spot price averaging at $120 a tonne in the current quarter.
Iron ore for immediate delivery to China .IO62-CNI=SI rose
1.3 percent to $117.20 a tonne on Monday, the highest since
April 1, according to data provider Steel Index.
The price spike, the raw material's third straight day of
gains, was spurred by a few cargoes sold at higher levels on
physical platform globalORE with overall trading activity lean
with Chinese markets shut on Monday for a public holiday.
Twenty-eight dry bulk vessels were chartered to haul spot
iron ore cargoes to Chinese buyers last week, the most since the
week ended Feb. 21, said Jeffrey Landsberg, managing director at
Commodore Research & Consultancy
"China continues to show that its demand for high quality
iron ore imports that remain at still relatively cheap prices is
very strong," Landsberg said in a note.

Shanghai rebar futures and iron ore indexes at 0229 GMT

Contract Last Change Pct Change
SHFE REBAR OCT4 3397 +45.00 +1.34
DALIAN IRON ORE DCE DCIO SEP4 820 +20.00 +2.50
THE STEEL INDEX 62 PCT INDEX 117.2 +1.50 +1.30
METAL BULLETIN INDEX 117.02 +0.32 +0.27
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2123 Chinese yuan)

(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)