Wed Feb 3, 2016 9:43am IST Iron ore at one-month top as firmer...

Wed Feb 3, 2016 9:43am IST
Iron ore at one-month top as firmer steel spurs buyers


* Firmer iron ore futures suggest further gains for spot
* Shanghai rebar gains, finds support at 1,800 yuan/T

By Manolo Serapio Jr
MANILA, Feb 3 Spot iron ore rose to one-month
peaks, with firmer futures on Wednesday pointing to more gains
ahead as higher Chinese steel prices encourage buyers to stock
up on the raw material before next week's Lunar New Year break.
Shanghai steel futures advanced, as prices found support
around 1,800 yuan ($274) a tonne after a recent decline from a
four-month high.
"If steel holds up I wouldn't be surprised to see iron ore
even go to $50," said a Shanghai-based trader.
Iron ore for immediate delivery to China's Tianjin port
.IO62-CNI=SI rose 1.4 percent to $43.10 a tonne on Tuesday, a
level last seen on Jan. 4, data from the Steel Index shows.
The spot benchmark last reached $50 in late October, falling
since amid a global glut at a time when Chinese steel demand
shrank due to a slowing economy.
"We're seeing cautious buyers so we're seeing a slow and
steady increase," said the trader. He said trading volumes in
physical markets were low with many Chinese participants already
out of the market ahead of the Feb. 8-12 Spring Festival.
Firmer iron ore futures suggest further gains for spot
prices. The most-traded May iron ore on the Dalian Commodity
Exchange was up 0.9 percent at 328 yuan a tonne by
midday. On the Singapore Exchange, March iron ore
jumped 1.1 percent to $42.92 a tonne.
ANZ Bank attributed iron ore's price increase to stabilising
steel prices "as markets expect intervention from policy makers
to boost growth".
"The slowdown in shipping from key (iron ore) producers in
anticipation of weak activity has led to temporary market
tightness," ANZ added.
The price of construction steel product rebar on the
Shanghai Futures Exchange was up 0.6 percent at 1,823
yuan a tonne. The most-active contract recovered from Tuesday's
low of 1,801 yuan, and moved closer to the four-month high of
1,871 yuan reached on Jan. 27.

Rebar and iron ore prices at 0355 GMT

Contract Last Change Pct Change
SHFE REBAR MAY6 1823 +11.00 +0.61
DALIAN IRON ORE DCE DCIO MAY6 328 +3.00 +0.92
SGX IRON ORE FUTURES MAR 42.92 +0.45 +1.06
THE STEEL INDEX 62 PCT INDEX 43.1 +0.60 +1.41
METAL BULLETIN INDEX 43.84 +0.82 +1.91


Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.5785 Chinese yuan)

(Reporting by Manolo Serapio Jr.)