China daily steel output slips in early October-CISA

SINGAPORE, Oct 17:  Spot iron ore prices touched near three-week highs as demand from top consumer China remained firm although gains were limited by a slow steel market.
Investors were eyeing the debut of China’s first iron ore futures on the Dalian Commodity Exchange on Friday which could offer buyers a reference price other than the benchmarks given by global index providers.
Benchmark 62 percent grade iron ore stood at $133.70 a tonne on Wednesday, its loftiest since Sept. 26, according to the latest available data compiled by Singapore-based Steel Index.
The price was only up by 10 cents, however, from Monday. Steel Index did not publish a price assessment on Tuesday due to a public holiday in Singapore.
‘There’s still moderate demand especially for prompt cargo but not so much for arrivals further out,’ said an iron ore trader in Shanghai, pointing to appetite for iron ore that can be delivered in 15-20 days.
Chinese steel mills have been replenishing iron ore inventories since returning from a week-long holiday earlier in the month, although the pace was far from aggressive given the weaker steel market.
The chances of a recovery in steel demand looks slim at the moment as cold weather that typically starts in China in November could curb activity in the steel-intensive construction sector.
On Thursday, the most briskly traded rebar contract for January delivery on the Shanghai Futures Exchange was off 0.2 percent at 3,575 yuan ($590) a tonne by the midday break.
Rebar, a construction steel product, is down slightly this month after falling 4.4 percent in September.
Amid the softer steel market, average daily crude steel output in China slipped to 2.128 million tonnes in the first 10 days of October from 2.152 million tonnes in the previous 10-day period, data from the China Iron and Steel Association showed.
The increased supply of iron ore is also limiting price gains. Australia’s Fortescue Metals Group, the world’s fourth-largest iron ore miner, said its shipments of iron ore for July-September jumped 61 percent to 25.9 million tonnes from a year ago.
Traders are eyeing the first day of trading of iron ore futures on the Dalian bourse and expecting brisk volumes.
The Dalian iron ore futures is China’s latest stab at boosting its power to price the world’s second-largest traded commodity after oil as a more volatile iron ore market exposes its legions of steel mills to more risks.
‘A lot of people are optimistic about that market and it can definitely be a reference price for iron ore buyers. It has option for physical delivery which would be better for those holding physical positions,’ said another trader in Shanghai. (AGENCIES)
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