* BHP, Vale Jan-March iron ore output fall on weather
* China daily crude steel output at 2.03 mln T early April
* High steel output unsustainable given slow demand-CISA
(Updates rebar price, adds BHP joining China platform)
By Manolo Serapio Jr
SINGAPORE, April 18 (Reuters) - Benchmark spot iron ore held
near six-month highs although buying appetite in top consumer
China remained thin after a recent spike in prices and traders
are eyeing a sale tender of Australian cargoes on Wednesday for
market direction.
China's daily crude steel output rose to a record 2.03
million tonnes in early April, although an industry group said
the high levels of production may not be sustained given the
slow growth in demand.
"Steel demand is weak and mills have no appetite to buy ore
at current prices - right now they don't need to and there's not
much activity on the spot market," said Sebastian Lewis, head of
data and analytics at Steel Business Briefing.
Iron ore with 62 percent iron content .IO62-CNI=SI was
little changed at $149.20 a tonne on Tuesday, according to the
Steel Index, not far off Friday's $149.40, which was the highest
level since Oct. 18.
Iron ore has rebounded 28 percent from 2011 lows as China's
steel production recovered to a record pace with mills looking
to a seasonal pickup in demand.
But prices remain 22 percent below last year's high,
underlining the slower rate of growth in China's import demand
as the world's No. 2 economy engineers a soft landing after
years of rapid growth.
Crude steel output in China, the world's biggest producer
and consumer, rose to a record 61.58 million tonnes in March as
mills responded to improved prices ahead of a seasonal increase
in demand in April and May.
The momentum continued in early April with daily crude steel
output hitting a record 2.03 million tonnes in the first 10 days
of this month, data from the China Iron & Steel Association
(CISA) showed.
UNSUSTAINABLE
But analysts are wary whether demand will recover strongly
amid signs the overall economy is slowing down, with China's
first-quarter growth expanding at its weakest pace in nearly
three years.
Even CISA itself said the current high production levels are
not sustainable.
"The current uptick in steel prices is the temporary outcome
of previous control over output, rather than growing steel
demand," CISA said.
The most-traded October rebar contract on the Shanghai
Futures Exchange gained half a percent to close at 4,342
yuan ($690) a tonne, snapping three days of losses.
Offer prices for imported iron ore in China were unchanged
for a fourth straight day on Wednesday, based on data from
Chinese consultancy Umetal, suggesting lean demand.
Australian Pilbara fines were quoted at $148-$149 a tonne,
Yandi fines at $135-$136, Newman fines at $150-$151 and Indian
63.5/63-grade fines at $150-$152, Umetal said. All prices
include freight costs.
Traders are eyeing a sale tender by global miner BHP
Billiton of Newman and Yandi fines on Wednesday
for price direction, and some are looking at slightly higher
prices.
"I think we should be able to see prices increase by 50
cents. Market is still good, still healthy. We're not seeing a
big rush to buy, but demand is steady," said a physical trader
in Hong Kong.
BHP, along with other top iron ore miners Vale
and Rio Tinto, posted sharp declines in quarterly iron
ore production due to bad weather, a factor that has helped
support iron ore prices at relatively high levels despite signs
of a softening market.
BHP said on Wednesday its January-March iron ore output fell
8 percent from the previous quarter, while data from Vale showed
production down more than 15 percent. Rio Tinto reported a 10
percent fall on Tuesday.
BHP will join China's first iron ore physical trading
platform that will start trading next month, an industry group
said, completing the participation of the world's top miners in
Beijing's bid to gain more control over pricing of the raw
material.
Shanghai rebar futures and iron ore indexes at 0806 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 4342 20.00 0.46
PLATTS 62 PCT INDEX 151 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 149.2 -0.10 -0.07
METAL BULLETIN INDEX 148.46 -0.09 -0.06
*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3015 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Sugita Katyal and
Himani Sarkar)
The thing about China is, they have agovernment that isnt totally disfunctional. They can crank it up when they want, andnthey are planning to do just that.
* China daily crude steel output at 2.03 mln T early April
* High steel output unsustainable given slow demand-CISA
(Updates rebar price, adds BHP joining China platform)
By Manolo Serapio Jr
SINGAPORE, April 18 (Reuters) - Benchmark spot iron ore held
near six-month highs although buying appetite in top consumer
China remained thin after a recent spike in prices and traders
are eyeing a sale tender of Australian cargoes on Wednesday for
market direction.
China's daily crude steel output rose to a record 2.03
million tonnes in early April, although an industry group said
the high levels of production may not be sustained given the
slow growth in demand.
"Steel demand is weak and mills have no appetite to buy ore
at current prices - right now they don't need to and there's not
much activity on the spot market," said Sebastian Lewis, head of
data and analytics at Steel Business Briefing.
Iron ore with 62 percent iron content .IO62-CNI=SI was
little changed at $149.20 a tonne on Tuesday, according to the
Steel Index, not far off Friday's $149.40, which was the highest
level since Oct. 18.
Iron ore has rebounded 28 percent from 2011 lows as China's
steel production recovered to a record pace with mills looking
to a seasonal pickup in demand.
But prices remain 22 percent below last year's high,
underlining the slower rate of growth in China's import demand
as the world's No. 2 economy engineers a soft landing after
years of rapid growth.
Crude steel output in China, the world's biggest producer
and consumer, rose to a record 61.58 million tonnes in March as
mills responded to improved prices ahead of a seasonal increase
in demand in April and May.
The momentum continued in early April with daily crude steel
output hitting a record 2.03 million tonnes in the first 10 days
of this month, data from the China Iron & Steel Association
(CISA) showed.
UNSUSTAINABLE
But analysts are wary whether demand will recover strongly
amid signs the overall economy is slowing down, with China's
first-quarter growth expanding at its weakest pace in nearly
three years.
Even CISA itself said the current high production levels are
not sustainable.
"The current uptick in steel prices is the temporary outcome
of previous control over output, rather than growing steel
demand," CISA said.
The most-traded October rebar contract on the Shanghai
Futures Exchange gained half a percent to close at 4,342
yuan ($690) a tonne, snapping three days of losses.
Offer prices for imported iron ore in China were unchanged
for a fourth straight day on Wednesday, based on data from
Chinese consultancy Umetal, suggesting lean demand.
Australian Pilbara fines were quoted at $148-$149 a tonne,
Yandi fines at $135-$136, Newman fines at $150-$151 and Indian
63.5/63-grade fines at $150-$152, Umetal said. All prices
include freight costs.
Traders are eyeing a sale tender by global miner BHP
Billiton of Newman and Yandi fines on Wednesday
for price direction, and some are looking at slightly higher
prices.
"I think we should be able to see prices increase by 50
cents. Market is still good, still healthy. We're not seeing a
big rush to buy, but demand is steady," said a physical trader
in Hong Kong.
BHP, along with other top iron ore miners Vale
and Rio Tinto, posted sharp declines in quarterly iron
ore production due to bad weather, a factor that has helped
support iron ore prices at relatively high levels despite signs
of a softening market.
BHP said on Wednesday its January-March iron ore output fell
8 percent from the previous quarter, while data from Vale showed
production down more than 15 percent. Rio Tinto reported a 10
percent fall on Tuesday.
BHP will join China's first iron ore physical trading
platform that will start trading next month, an industry group
said, completing the participation of the world's top miners in
Beijing's bid to gain more control over pricing of the raw
material.
Shanghai rebar futures and iron ore indexes at 0806 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 4342 20.00 0.46
PLATTS 62 PCT INDEX 151 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 149.2 -0.10 -0.07
METAL BULLETIN INDEX 148.46 -0.09 -0.06
*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3015 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Sugita Katyal and
Himani Sarkar)
The thing about China is, they have agovernment that isnt totally disfunctional. They can crank it up when they want, andnthey are planning to do just that.
