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Iron ore market looks to China steel demand-14 Apr 12

Reuters reported that spot iron ore prices in top consumer China mostly held steady recently as buyers remained hesitant in picking up cargoes amid a slow recovery in steel demand.
Resumption in construction activity after winter has helped stabilise Chinese steel prices, but analysts say domestic steel production needs to rise significantly to support another rally in iron ore prices.
At USD 147.60 a tonne currently for 62% grade ore, iron ore .IO62 CNI=SI has barely moved from the end of March with Chinese steel mills unsure whether steel demand will rebound strongly enough to warrant more buying of the raw material.
Preliminary customs data showed China iron ore imports fell 3.2% from February to 62.87 million tonnes in March. Despite the drop, the import volume remains healthy and suggests mills are holding out for a recovery in steel demand.
Mr Graeme Train commodity analyst at Macquarie in Shanghai said "Mills'' inventory of iron ore isn''t too high, but it isn''t too low and what it means is there''s just no real urgency in buying now."
He said that "So to get the next leg of upside in iron ore prices you either need to see China really stepping up its steel production, or you need to have another big buyer in the market so you need to see recovery in Japan, South Korea or Europe to tighten up the seaborne market a little bit."
Industry consultancy Umetal said offer prices of imported ore in China were mostly unchanged except for some lower-grade Indian cargoes which rose by USD 1 a tonne on Tuesday.
Tighter supplies out of India, the world No 3 iron ore exporter after Australia and Brazil have helped support Indian prices.

( Source: steelguru.com)

Apr 14, 2012 14:56
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