Mon, 14 Oct 04:23:00 GMT
* China Sept iron ore imports at record high 74.58 mln T
* Iron ore rose 1.3 pct last week, biggest gain since Aug
By Manolo Serapio Jr
SINGAPORE, Oct 14 (Reuters) - Spot iron ore prices may struggle this week to build on recent gains, with Chinese steel mills wary about aggressively replenishing stockpiles given a tepid pace in steel consumption.
Shanghai steel futures were steady on Monday and have only gained about half a percent this month after sliding more than 4 percent in September, reflecting headwinds in the top consumer.
China's exports unexpectedly dropped in September, according to customs figures released on Saturday, defying a recent slew of data that pointed to a stabilising Chinese economy. On Monday, other data showed China's annual consumer inflation hit a seven-month high, limiting the scope for the central bank to support the economy. [ID:nL4N0I202X][ID:nL3N0I409L]
"There's plenty of iron ore in the market and steel mills are quite cautious, they're not willing to pay higher prices because steel prices haven't picked up yet," said a Shanghai-based trader.
"I see more downward pressure than upward push for iron ore," he said, adding that the market could test $127 in the short term.
Benchmark 62-percent grade iron ore <.IO62-CNI=SI> was little changed at $133.10 a tonne on Friday, according to data compiler Steel Index. Still, that was the highest level for the steelmaking raw material since Sept. 26.
On Monday, the most-traded rebar contract for January delivery on the Shanghai Futures Exchange was nearly flat at 3,609 yuan ($590) a tonne by the midday break.
Iron ore prices rose 1.3 percent last week as mills restocked after the Golden Week holiday in early October. That was the sharpest gain since the week ended Aug. 16.
There was no shortage of offers on the spot market as miners steadily unloaded cargoes having boosted production. Global miner Rio Tinto is selling another cargo of South African iron ore concentrate at a tender closing later on Monday, traders said.
Rio, along with other Australian miners BHP Billiton and Fortescue Metals Group , are in the midst of robust expansion work that is expected to be reflected in bigger third-quarter output and even higher production in the fourth quarter. [ID:nL4N0HZ2C7]
That may have helped boost China's iron ore imports which hit a record high 74.58 million tonnes in September, traders said. [ID:nL4N0I2050]
Around 10-15 percent of the imported iron ore volume last month may have been purchased by trading firms which have yet to sell the cargoes to the market, said another Shanghai trader.
Shanghai rebar futures and iron ore indexes at 0404 GMT
Contract Last Change Pct Change
SHFE REBAR JAN4 3609 +2.00 +0.06
THE STEEL INDEX 62 PCT INDEX 133.1 +0.10 +0.08
METAL BULLETIN INDEX 133.34 +0.52 +0.39
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.1206 Chinese yuan)
(Editing by Tom Hogue)