Chinese iron ore futures ticked higher but kept near one-month lows on Tuesday, as ample supply of the steelmaking raw material countered transport disruptions caused by heavy snow in the country.
Rebar steel prices slipped, touching their lowest level in nearly a week at one point.
Heavy snow has led to transport bottlenecks in China, snarling railroads and highways and cutting off critical supplies of some commodities like thermal coal.
But supply of iron ore appears unaffected for now.
“High iron ore inventories, both at the ports and at steel mills, suggest the impact from such disruptions will be low and have little price impact,” ANZ analysts said in a note.
The most-actively traded iron ore contract for May delivery on the Dalian Commodity Exchange was up 0.7 percent at 519.50 yuan ($82) a tonne by 0213 GMT. The contract initially touched 513.50 yuan, not far above Monday’s one-month trough of 511 yuan.
Stocks of imported iron ore at China’s ports stood at 153.13 million tonnes on Jan. 26, falling for the first time in 15 weeks, but still near the record 154.43 million tonnes from the previous week, according to data tracked by SteelHome consultancy. SH-TOT-IRONINV
At small- and medium-sized Chinese mills, iron ore inventory rose 9.4 percent as of Jan. 19 from Jan. 5, Morgan Stanley said.
The benchmark spot iron ore price was little changed on Monday, standing at $74.33 a tonne, according to Metal Bulletin.
Steel inventory at Chinese traders has also recovered, reaching 3.97 million tonnes for construction product rebar as of Friday, more than a million tonnes higher from an all-time low of 2.84 million tonnes in mid-December, SteelHome data showed. SH-TOT-RBARINV
“With better-than-expected macro data, industry started building up stock in preparation for the peak season after Chinese New Year,” Morgan Stanley said in a note. The week-long Chinese holiday begins on Feb. 15.
The most-traded rebar on the Shanghai Futures Exchange slipped 0.6 percent to 3,923 yuan a tonne.
Source: ReutersPrevious Next