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PrintReuters reported that Chinese iron ore futures gained after seven day decline as Shanghai steel prices edged off four month lows although the modest increases suggest investors remain cautious on the outlook for demand amid a tepid steel market.
Traders said that appetite for iron ore cargoes for immediate delivery to China was limited on expectations prices could drop further with spot rates drifting to their lowest level since mid September.
The most briskly traded iron ore contract for May delivery on the Dalian Commodity Exchange was up 0.4% at CNY 921 per tonne by 0340 GMT. It touched CNY 913 on Tuesday, its lowest since the contract debuted on October 18.
At the Shanghai Futures Exchange, the most-active May rebar rose 0.7% to CNY 3,619 per tonne after falling to CNY 3,575 its weakest since June 27.
A trader in China's eastern Shandong province said that "These gains are largely in line with firmer equities but demand for iron ore in the physical market remains weak. We're only looking to buy Dalian when the price comes down to CNY 900.”
According to data provider Steel Index, iron ore for immediate delivery in China's Tianjin port. IO62-CNI=SI slipped 0.4% to USD 131.30 per tonne the lowest since September 17.
A Shanghai based trader said that "The general feeling is that the market will continue to drop especially for lower grade cargoes of between 56% to 58% (iron content) where there's plenty of supply."
Global miner BHP Billiton sold a cargo of Australian 57.7% grade Yandi iron ore fines at USD 119.20 per tonne at a tender down from USD 123.66 at a sale in mid October.
BHP is selling another 80,000 tonnes of 62.7% grade Newman fines at a tender closing later on Wednesday. BHP last week increased its iron ore output target for fiscal 2014 to 212 million tonnes from a previous goal of 207 million tonnes, joining other major producers in expanding production in hopes of capturing more of a slower growing Chinese market.
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