Spot iron ore prices hovered near record highs and offers remained firm around $200 a tonne on Thursday, but a sharp fall in forward swaps reflected market caution about the recent price surge.
Buying from Chinese steelmakers and traders have slowed in the past few days, with some hesitant to grab spot cargoes after prices hit a series of record highs recently.
Tight Indian supplies and firm demand from top buyer China have lifted iron ore prices by 13-14 per cent so far this year, adding to gains of more than 40 per cent in 2010.
“There’s some resistance from the Chinese buyers with prices at such high levels,” said an iron ore trader in Singapore.
“Everybody’s cautious right now but offers are still firm. I haven’t heard of any spot bookings.”
Indian ore, which dominates the spot market, is still being quoted from $197 to $200 a tonne for material with 63.5 per cent iron content, including freight, according to traders and Chinese consultancy Mysteel.
The Steel Index’s 62 per cent iron ore benchmark rose $1.30 to a record $191.90 a tonne, with freight, on Wednesday. Platts’ 62 per cent iron ore index was unchanged at $193, an all-time high reached in the previous session.
Metal Bulletin’s 62 per cent index slipped 18 cents to $190.69 after hitting a record level on Tuesday.
“It is difficult for prices to rise further right now because steel prices are falling this week,” said an iron ore trader in Beijing. “Steel mills want to hold back purchases but they may buy again next week.”
Shanghai rebar retreats
Shanghai steel futures fell to three-week lows on Thursday after hitting a series of record highs last week, spurred by rising raw material costs and the anticipation of a pickup in demand from China’s construction sector in spring.
The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange closed down 1.7 per cent at 5,018 yuan a tonne, after falling to as low as 5,007 yuan earlier. Volume traded was a brisk 720,920 lots.
Costlier raw material had prompted Chinese steelmakers to raise product prices for a third month in a row in March, although the Chinese government said on Wednesday the volatility in steel prices will cut profit margins of domestic steel mills.
Iron ore forward swaps fell on Wednesday, indicating caution among market players after the recent rapid surge in spot prices.
The Singapore Exchange-cleared February contract dropped $1.22 to $187.50 a tonne, March fell $2.74 to $181.38 and April slid $4.87 to $168.75.
豫公网安备41010502003434号