iron ore prices

Iron Ore-Spot prices rise, traders remain wary
Fri Dec 23, 2011 4:23am GMT


SHANGHAI, Dec 23 (Reuters) - Spot prices for iron ore
to top buyer China extended gains for a fourth consecutive day
as miners continued to raise offers to meet rising demand from
Chinese steel mills, while traders remain wary over the
short-term outlook for steel demand.
Steel mills are replenishing stockpiles of the raw material
for production during the holiday season, encouraging miners to
lift offers by about 4 percent over the week.
"My feeling is that this round of (iron ore price) rises can
be sustained before the new year, but I can't say for sure after
the holiday," said an iron ore trader in Shandong province. "As
long as steel mills don't cut production, there will be no
downward side for iron ore prices, but if steel prices fall, we
won't see any sustainable gains in iron ore prices."
Iron ore index with 62 percent Fe grade .IO62-CNI=SI
extended gains on Thursday, the highest since Dec. 14.
The government is reported to have targeted construction of
7 million social housing units next year, which, while less than
in 2011, could still drive up steel demand. Beijing has vowed to
link construction to the performances of local governments in
pushing the project ahead.
"The strength of steel demand from affordable housing
construction next year remains uncertain," said a second iron
ore trader in Beijing. "I expect iron ore prices to stay around
$135 per tonne in the near future."
The most active rebar futures on the Shanghai Futures
Exchange hit a more than three-week high of 4,222 yuan
($670) per tonne on Friday, up 1.2 percent this week.
Shanghai rebar futures and iron ore indexes at 0330 GMT


Contract Last Change Pct Change
SHANGHAI REBAR* 4207 1.00 0.02
PLATTS 62 PCT INDEX 137 0.25 0.18
THE STEEL INDEX 62 PCT INDEX 135.2 0.40 0.30
METAL BULLETIN INDEX 135.51 0.71 0.53


*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading
day
($1 = 6.3390 Chinese yuan)

(Reporting by Ruby Lian and Jason Subler; Editing by Chris
Lewis)