Fri, 11 Oct 04:28:00 GMT
* Shanghai rebar up slightly for the week
* Baosteel keeps prices steady for November
* Dalian exchange to launch iron ore futures Oct. 18
By Manolo Serapio Jr
SINGAPORE, Oct 11 (Reuters) - Spot iron ore prices rose to the highest level in two weeks and are set to end the week with their biggest gain since mid-August as Chinese steel mills rebuild stockpiles.
Chinese mills have been producing crude steel at near record rates of more than 2.1 million tonnes for the most part of this year amid relatively healthy domestic demand.
Ore with 62 percent iron content <.IO62-CNI=SI> climbed nearly 1 percent to $133 a tonne on Thursday, its highest since Sept. 26, based on the latest available data compiled by Steel Index. It is up 1.2 percent for the week so far.
"Most of the buyers are looking for prompt cargo and we are seeing a lot of people inquiring," said a trader in Shanghai who sells Indian iron ore. "We might continue to see this for another week to 10 days."
Mills are replenishing inventories as Chinese markets reopened on Tuesday after a week-long National Day break.
Australian spot cargoes from miners BHP Billiton and Rio Tinto sold via tenders and physical platforms were snapped up this week as producers ramp up output.
But some caution is still in the air, and not all mills are buying iron ore aggressively given modest movements in steel prices.
"While some traders reported better interest, mills said they would hold off in anticipation of lower prices later this month," according to Steel Index.
Shanghai steel futures edged up on Friday, but are only up less than half a percent for the week.
Baoshan Iron and Steel <600019.SS>, China's biggest listed steelmaker, kept its prices for November unchanged. [ID:nB9N0HE016]
"I think it shows that Baosteel is not confident about the market since demand is more sluggish than what it had expected and it does not have clear visibility for a meaningful rebound," said Helen Lau, senior metals and mining analyst at UOB-Kay Hian Securities in Hong Kong.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange was up 0.2 percent at 3,602 yuan ($590) a tonne by the midday break. It has gained just 0.4 percent for the week, after falling to a three-month low of 3,541 yuan on Tuesday.
Elsewhere, the Dalian Commodity Exchange is planning to launch China's first iron ore futures contract on Oct. 18, according to a source with direct knowledge of the matter. [ID:nB9N0EG02M]
The move is China's latest stab at boosting its power to price the world's second-largest traded commodity after oil and could pose a threat to the $28 billion iron ore swaps market by exploiting massive untapped hedging potential at home. [ID:nL4N0HZ0AC]
Shanghai rebar futures and iron ore indexes at 0403 GMT
Contract Last Change Pct Change
SHFE REBAR JAN4 3602 +6.00 +0.17
THE STEEL INDEX 62 PCT INDEX 133 +1.20 +0.91
METAL BULLETIN INDEX 132.82 +0.60 +0.45
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.1158 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Michael Perry)