China’s Spot Iron Ore Prices Increase 1.7%, Fourth Week of Gain...

China’s Spot Iron Ore Prices Increase 1.7%, Fourth Week of Gain

By Xiao Yu

Dec. 1 (Bloomberg) -- Cash prices of iron ore imported by China, the world’s biggest buyer of the steelmaking ingredient, rose for a fourth week, gaining 1.7 percent after the government announced a 4 trillion yuan ($586 billion) stimulus package.

Prices at Qingdao, China’s biggest iron ore port, advanced to 610 yuan a metric ton, according to Beijing Antaike Information Development Co. Prices gained 13 percent in November.

China is investing in housing, railways, roads and airports to bolster slowing growth in the world’s fourth-largest economy, raising expectations steel and metals consumption will increase.

“Steel prices have stabilized as demand for some products, such as construction steel, is recovering,” Ma Haitian, analyst at Antaike, said by phone from Beijing today. Construction steel prices have gained 10 percent to 3,600 yuan a ton from its lowest level in October, he said.

Cash prices of iron ore are still down 60 percent this year. China buys most of its spot iron ore from Indian producers. Long-term contract iron ore prices may drop 40 percent next year because steelmakers are cutting demand, UBS AG has forecast.

Antaike is the research affiliate of China Nonferrous Metals Industry Association.

To contact the reporter for this story: Xiao Yu in Beijing at [email protected];