China''s offers for imported iron ore remained firm on Thursday amid a continuous rally in steel prices this week, while the overly fast rise of iron ore prices has triggered growing market concerns.
The Steel Index iron ore benchmark hit $167 per tonne on Wednesday, the highest level since May 13 and 1.3 percent higher from Tuesday.
However, Chinese domestic steel mills have not been keen to build up more inventories and remained reluctant to buy shipments above $170 per tonne cost and freight after seeing a rapid rise in iron ore prices, pushed up by overseas iron ore suppliers.
"The key reason for slim buying of iron ore is the overrapid rise of prices, which was caused from an anticipation of rising prices in the first quarter, but it is too early to make a big price rise now," an iron ore trader in Shanghai said.
"Our customers don''t lack stocks, and I haven''t heard any big transactions so far this week," the trader added.
Imported iron ore with 63.5 iron content is being offered at about $170-172 per tonne cost and freight, keeping the same from Tuesday, traders said.
A few big steel mills are buying small tonnages, possibly at 30,000-50,000 tonnes from spot market as they have no problem with inventories, another trader in Beijing said.
"The iron ore market seems to keep good with prices standing firm, but the market buying activity hasn''t picked up at same pace," he added.
Shanghai rebar futures SRBK1 extended gains on Thursday, rising by a modest 0.5 percent to end at 4,719 yuan ($709.4) in the morning trading from the previous closing.
Iron ore forward swaps fell on Wednesday, with the Singapore Exchange-cleared December contract SGXIOSZ0 up $1.55 to $163.85 per tonne and the January contract SGXIOSF1 rising 85 cents to $157.25 per tonne.