ASIAN iron ore prices rose 8% yesterday after a week of increased buying from Chinese steelmakers, instilling hopes of a rebound in demand after a lull of almost three months. Traders in China and India said mills and speculative traders remained cautious as they were not confident the pick-up from the steel sector would be sustained.
“There are a few transactions being made,” a large Beijing-based iron ore trader said.“Steel mills are still being prudent and purchasing very small tonnages, with the majority of the transactions being carried out by traders themselves."A trader in India echoed the same sentiment.
“There is an improvement in steel prices in China, but it is not proper yet to say prices have recovered,” the New Delhi-based trader said.China-based consultant Mysteel yesterday quoted ores of foreign origin with 63.5% iron content at US$135 a tonne with freight, up from last week’s US$125.The Steel Index 62% iron ore index was unchanged on Wednesday at US$121.60, having risen 3.4% in the past week from its lowest since late December.The iron ore swaps trade also improved yesterday, reflecting an increase in buying interest in the physical market.
“Following the pick-up in the physical market early this week, the iron ore swaps gained further momentum for their third consecutive day,” Gabrielle Richou, a broker at Freight Investor Services in Singapore said.August iron ore swaps cleared by the Singapore Exchange settled almost US$2 higher at US$125.62 on Wednesday.