Iron Ore-Shanghai rebar gains for 3rd day, Baosteel hikes price– 16 Aug 11

 Shanghai rebar futures rose for a third straight day on Friday, tracking gains in equities after a volatile week, although caution about the fate of the global economy has restrained buying interest in steelmaking ingredient iron ore.

The most active January rebar contract on the Shanghai Futures Exchange SRBc6 closed up 0.2 percent at 4,809 yuan per tonne.

Rebar, used in construction, was largely unchanged for the week, regaining some lost ground after falling to its lowest in more than four months on Tuesday.

"The market just responded to the overnight rise on Wall Street, but the unstable global economy may continue to weigh on prices, though rebar fundamentals are still healthy in the long term," said a senior Shanghai rebar trader.

Asian stocks edged up on Friday as investors chased value picks following recent sharp volatility after U.S. shares jumped 4 percent overnight.

China's top listed steelmaker Baoshan Iron & Steel said it will raise prices for cold-rolled steel by 120 yuan per tonne for September bookings, but will keep prices for hot-rolled coil unchanged.

Despite firmer steel prices, Chinese mills have been reluctant to buy more iron ore as concerns the U.S. economy may be recession bound and a widening debt crisis in Europe dimmed the outlook for commodity demand and prices.

"Mills have stepped back from purchases this week as the global economic uncertainty clouds the market sentiment," said an iron ore trader in eastern China's Rizhao city.

Offers for Indian 63.5/63-grade iron ore were steady at around $184-$186 per tonne, including freight, with deals scarce, traders said.Investor concerns about the global economy weighed on prices of iron ore forward swaps on Thursday, with Singapore Exchange-cleared contracts <0#SGXIOS:> from August 2011 through December 2013 mostly down.

Global iron ore indexes, tracking spot deals in the world's top buyer China, also dropped.