SINGAPORE, Nov 12: Spot iron ore prices held steady at around $136 a tonne, struggling to build on last week’s gains as Chinese appetite for the raw material slowed after recent buying.
Traders expect prices, which are down about 15 percent from this year’s peak near $160 a tonne, to stabilise at current levels for the rest of the month, saying India’s move to free up more than 11 million tonnes of stockpiled material is unlikely to impact direction.
Benchmark 62-percent grade iron ore <.IO62-CNI=SI> was unchanged at $135.90 a tonne on Monday, according to data compiler Steel Index.
The price reached a two-month peak of $137.10 on Nov. 6 as Chinese mills snapped up spot cargoes but the momentum has since eased. Iron ore rose for a fourth week out of five last week.
‘We expect the price to trade between $133 and $136 for the rest of November. A lot of the buying has happened already,’ said an iron ore trader in Shanghai.
India’s move on Monday to allow the sale of 11.46 million tonnes of iron ore already mined in top producing state Goa is unlikely to affect spot prices, he said, with appetite for lower grade material limited.
‘If this will be sold at a discount to the market price, it will find a buyer. Otherwise most Chinese mills are now using Australian cargo which are of higher grade,’ said the trader, who sells high-grade ore from the Indian state of Odisha to Chinese steelmakers.
India’s Supreme Court maintained a 14-month ban on iron ore mining in the Goa state and set up a panel to determine an output limit. The panel is expected to submit an interim report by Feb. 15, 2014.
In China, steel and iron ore futures ticked higher as investors awaited the outcome of the Communist Party’s meeting.
Chinese leaders will be announcing a 10-year reform agenda at the end of its Communist Party meeting today with economic-focused measures likely to dominate, although some analysts say chances of seeing any big surprises are small.
President Xi Jinping and Premier Li Keqiang must unleash new growth drivers as the world’s No. 2 economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness.
The most-traded rebar for May delivery on the Shanghai Futures Exchange was up 0.4 percent at 3,669 yuan ($600) a tonne by the midday break. The most-active May iron ore contract at the Dalian Commodity Exchange gained 0.2 percent to 940 yuan a tonne.
(agencies)
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