Chinese iron ore futures rise, some steel mills return to market
http://in.reuters.com/article/2015/02/03/markets-ironore-idINL4N0VC3KE20150203
* Steel mills replenish stocks ahead of New Year holiday
* Iron ore stockpiles at Chinese ports fall 1 pct to 98.8
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SHANGHAI, Feb 3 (Reuters) - Chinese iron ore futures
rebounded on Tuesday and were on course for their second-biggest
daily gain this year, with traders saying some steel mills had
made a surprising return to the market, sensing that ore prices
might be near the bottom.
Some mills had started restocking even though trading is
normally quiet ahead of the Lunar New Year holiday, which falls
in mid-Feburary. Some expect iron ore could find support at $60
after losing nearly half its value in 2014.
Benchmark 62 percent grade iron ore for immediate delivery
to China .IO62-CNI=SI fell 0.7 percent to $61.30 a tonne on
Monday, its 11th straight drop, according to data compiled by
the Steel Index.
But on Tuesday the most active iron ore futures for May
delivery on the Dalian Commodity Exchange were up 1.5
percent at 480 yuan ($77) after touching 482 yuan, the highest
since Jan. 23.
Chinese steel mills had refrained from buying in recent
weeks as a sharp fall in steel prices and sluggish sales had
forced many to curtail production, curbing appetite for iron
ore.
"Buying interest has picked up since yesterday as some
expect further downside room for iron ore to be limited, but due
to the weak market fundamentals for steel, restocking will be
limited," said an iron ore trader in Shandong province.
Imported iron ore stockpiles at major Chinese ports
SH-TOT-IRONINV fell for the second week in a row last week,
down 1 percent at 98.8 million tonnes as of Jan. 30, according
to data provider Steelhome. But that was still 6.7 percent
higher than the same time last year.
However, there are growing expectations that steel prices
could get a lift after the New Year holiday.
"Some traders are hoping the market will improve after the
holiday, given current market inventories in a few big cities
are about one-third lower than a year ago, mills are still
cutting production and demand will pick up from the winter
lull," said a second trader in Shanghai.
The most traded May rebar contract on the Shanghai Futures
Exchange was down 0.6 percent at 2,482 yuan. The price
has fallen 4.3 percent so far this year.
Rebar and iron ore prices at 0406 GMT
Contract Last Change Pct Change
SHFE REBAR MAY5 2482 -14.00 -0.56
DALIAN IRON ORE DCE DCIO MAY5 480 +7.00 +1.48
SGX IRON ORE FUTURES MAR 62.37 +0.93 +1.51
THE STEEL INDEX 62 PCT INDEX 61.3 -0.40 -0.65
METAL BULLETIN INDEX 62.45 +0.24 +0.39
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day