Shanghai rebar hits 3-month low as China returns from break

Industry News 12:49:11PM Oct 08, 2013 Source:SMM

Tue, 8 Oct 04:29:00 GMT

* Steel raw materials coke, coking coal fall over 2 pct
* Chinese mills seeking iron ore cargoes at discount

By Manolo Serapio Jr

SINGAPORE, Oct 8 (Reuters) - China steel rebar futures fell more than 1 percent to three-month lows on Tuesday amid a tepid outlook for demand in the world's top consumer as Chinese markets reopened after a week-long holiday.

Prices of steelmaking raw materials traded in China such as metallurgical coke and coking coal dropped more than 2 percent.

"The steel market is not showing signs of a pickup, that's why we're seeing further pressure on prices of steel and related commodities," said a trader in Shanghai.

Steel stockpiles in China, including rebar, have risen in September after steadily falling since March, based on industry estimates. That was because consumption did not pick up pace as many had expected although Chinese mills kept output of crude steel at near record highs above 2 million tonnes a day. [STEE/CN]

The most-traded rebar contract for January delivery on the Shanghai Futures Exchange was down 1.3 percent at 3,542 yuan ($580) a tonne by the midday break, just off the session low of 3,541 yuan, its weakest since July 2.

At the Dalian Commodity Exchange, coke fell 2.6 percent to an intraday low of 1,514 yuan a tonne and coking coal dropped 2.1 percent to 1,113 yuan. Both levels are the lowest since Aug. 9.

China accounts for nearly half of the world's steel demand and the World Steel Association sees Chinese consumption growth slowing to 3 percent in 2014 from an estimated 6 percent this year.

Global steel demand is forecast to increase 3.3 percent to 1.523 billion tonnes, slightly above the forecast growth of 3.2 percent in April, the association said on Monday. [ID:nL6N0HX2A2]

The weakness in steel could weigh on bids for spot iron ore cargoes, traders said.

"There are some mills looking for cargoes but they're trying to test the market with lower bids to see if any sellers would emerge," said the Shanghai trader.

Some buyers are looking for 61.5 percent grade Australian Pilbara iron ore fines at around $129-$130 a tonne versus the market price of $131-$132, he said.

Benchmark 62 percent grade iron ore <.IO62-CNI=SI> for delivery to China stood at $131.40 a tonne for a sixth straight day on Monday, based on data compiled by Steel Index, reflecting a slow spot market with China shut for the Oct. 1-7 National Day holiday.

"I think we might see some buyers return later this week so that could keep prices stable between $130-$135," said a trader in Hong Kong.

Shanghai rebar futures and iron ore indexes at 0348 GMT


Contract Last Change Pct Change

SHFE REBAR JAN4 3542 -46.00 -1.28

THE STEEL INDEX 62 PCT INDEX 131.4 +0.00 +0.00

METAL BULLETIN INDEX 131.41 +0.00 +0.00


Rebar in yuan/tonne

Index in dollars/tonne, show close for the previous trading day

($1 = 6.1220 Chinese yuan)


(Editing by Muralikumar Anantharaman)

((manolo.serapio@thomsonreuters.com)(+65 6870 3884)(Reuters Messaging: manolo.serapio.thomsonreuters.com@reuters.net))

 

Key Words:  MARKETS IRONORE 

Shanghai rebar hits 3-month low as China returns from break

Industry News 12:49:11PM Oct 08, 2013 Source:SMM

Tue, 8 Oct 04:29:00 GMT

* Steel raw materials coke, coking coal fall over 2 pct
* Chinese mills seeking iron ore cargoes at discount

By Manolo Serapio Jr

SINGAPORE, Oct 8 (Reuters) - China steel rebar futures fell more than 1 percent to three-month lows on Tuesday amid a tepid outlook for demand in the world's top consumer as Chinese markets reopened after a week-long holiday.

Prices of steelmaking raw materials traded in China such as metallurgical coke and coking coal dropped more than 2 percent.

"The steel market is not showing signs of a pickup, that's why we're seeing further pressure on prices of steel and related commodities," said a trader in Shanghai.

Steel stockpiles in China, including rebar, have risen in September after steadily falling since March, based on industry estimates. That was because consumption did not pick up pace as many had expected although Chinese mills kept output of crude steel at near record highs above 2 million tonnes a day. [STEE/CN]

The most-traded rebar contract for January delivery on the Shanghai Futures Exchange was down 1.3 percent at 3,542 yuan ($580) a tonne by the midday break, just off the session low of 3,541 yuan, its weakest since July 2.

At the Dalian Commodity Exchange, coke fell 2.6 percent to an intraday low of 1,514 yuan a tonne and coking coal dropped 2.1 percent to 1,113 yuan. Both levels are the lowest since Aug. 9.

China accounts for nearly half of the world's steel demand and the World Steel Association sees Chinese consumption growth slowing to 3 percent in 2014 from an estimated 6 percent this year.

Global steel demand is forecast to increase 3.3 percent to 1.523 billion tonnes, slightly above the forecast growth of 3.2 percent in April, the association said on Monday. [ID:nL6N0HX2A2]

The weakness in steel could weigh on bids for spot iron ore cargoes, traders said.

"There are some mills looking for cargoes but they're trying to test the market with lower bids to see if any sellers would emerge," said the Shanghai trader.

Some buyers are looking for 61.5 percent grade Australian Pilbara iron ore fines at around $129-$130 a tonne versus the market price of $131-$132, he said.

Benchmark 62 percent grade iron ore <.IO62-CNI=SI> for delivery to China stood at $131.40 a tonne for a sixth straight day on Monday, based on data compiled by Steel Index, reflecting a slow spot market with China shut for the Oct. 1-7 National Day holiday.

"I think we might see some buyers return later this week so that could keep prices stable between $130-$135," said a trader in Hong Kong.

Shanghai rebar futures and iron ore indexes at 0348 GMT


Contract Last Change Pct Change

SHFE REBAR JAN4 3542 -46.00 -1.28

THE STEEL INDEX 62 PCT INDEX 131.4 +0.00 +0.00

METAL BULLETIN INDEX 131.41 +0.00 +0.00


Rebar in yuan/tonne

Index in dollars/tonne, show close for the previous trading day

($1 = 6.1220 Chinese yuan)


(Editing by Muralikumar Anantharaman)

((manolo.serapio@thomsonreuters.com)(+65 6870 3884)(Reuters Messaging: manolo.serapio.thomsonreuters.com@reuters.net))

 

Key Words:  MARKETS IRONORE