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Dalian iron ore keeps gains on pre-holiday restocking

Published 08/06/2016, 02:44 pm
Updated 08/06/2016, 02:50 pm
© Reuters.  Dalian iron ore keeps gains on pre-holiday restocking

* Chinese markets shut on Thursday and Friday for public holidays

* China May iron ore imports highest since December

* China steel exports rise again in May despite trade tensions

By Manolo Serapio Jr

MANILA, June 8 (Reuters) - Iron ore futures in China steadied near two-week highs on Wednesday as some Chinese steel producers replenished inventories of the raw material ahead of public holidays over the next two days.

Chinese markets are shut on Thursday and Friday for the Dragon Boat Festival.

"We didn't see big volatility on the demand side," said an iron ore trader in Shanghai on appetite for the steelmaking commodity. "Demand has been quite stable and we're seeing some interest for port cargoes."

Iron ore imports by top buyer China rose 3.4 percent in May from April to 86.75 million tonnes, the highest since December, customs data showed. our calculations, the share of imports in China's total iron ore consumption has hit historic highs of over 90 percent in recent months, driven by falling domestic production," said Daniel Hynes, commodity strategist at ANZ.

The most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 was up 0.1 percent at 369 yuan a tonne, after hitting 374.50 yuan earlier, matching Tuesday's two-week top.

On the Shanghai Futures Exchange, the most-active rebar SRBcv1 was up 0.8 percent at 2,091 yuan a tonne, after rising as far as 2,115 yuan, the highest since May 18.

The price of the construction steel product has risen for four sessions in a row, helped by expectations of tighter Chinese supply in the short term following another round of production curbs in the top steelmaking city of Tangshan next week to improve air quality. steel exports rose 3.7 percent to 9.42 million tonnes in May from the previous month as steel mills continued to ship more abroad despite rising trade tensions, mainly with the United States and Europe.

China's steel exports to Asia, its biggest market, remain strong given the competitive advantage of Chinese producers, said ANZ's Hynes.

"We expect to see exports hold up relatively well this year, maybe above 100 million tonnes," he said.

China's steel exports reached a record 112 million tonnes in 2015.

South Korea is the top market for Chinese steel, with shipments reaching 13.5 million tonnes last year, compared with 2.35 million tonnes to the United States, according to data compiled by MEPS consultancy.

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