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Iron ore futures jump as China returns from holiday

Published 15/02/2016, 02:54 pm
© Reuters.  Iron ore futures jump as China returns from holiday

* Singapore iron ore climbs over 3 pct, Dalian also up

* China Jan iron ore imports rise 4.6 pct yr/yr

* China Jan exports, imports fall much faster than expected

By Manolo Serapio Jr

MANILA, Feb 15 (Reuters) - Iron ore futures in Singapore climbed more than 3 percent and those in China edged higher on Monday as Chinese markets reopened after the week-long Lunar New Year holiday.

The gains could be fleeting amid indications of further weakness in China's economy, traders and brokers said. Data showed the country's exports and imports shrank much faster than expected in January. most-traded May iron ore on the Singapore Exchange SZZFK6 was up 3.3 percent at $40.08 a tonne by 0338 GMT. On the Dalian Commodity Exchange, May iron ore DCIOcv1 rose 0.9 percent to 338 yuan ($52) a tonne.

After falling during the Chinese holiday, Singapore prices are back to where they were before the break, said a Singapore-based broker.

"I don't see sustainability in it. But no doubt today's move on futures will probably see some better physical cargo traded," he said.

That should help the spot benchmark recover from a steep loss on Friday, he said. Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI slid nearly 3 percent to $43.20 a tonne that day, according to data compiled by The Steel Index.

Just before China went on break, the steelmaking raw material scaled an 11-week high of $44.70 on Feb. 4 as steel mills replenished stockpiles and traders took positions in anticipation of a stronger market after the holiday.

"(Friday's decline) suggests the strong supply growth from key iron ore exporters is easing temporary tightness in the Chinese market," said investment bank ANZ.

"A rebound in Chinese steel prices holds the key for any rebound in seaborne iron ore prices."

Most Chinese traders were only expected to return to the market later in the week or next week, traders said, suggesting a slow pickup in trading activity just after the Lunar New Year.

China's iron ore imports rose 4.6 percent in January from a year earlier to 82.19 million tonnes, as domestic steel mills replenished inventories with cheap overseas supplies, customs data showed. and iron ore prices at 0338 GMT

Contract

Last

Change Pct Change SHFE REBAR MAY6

1859

+17.00

+0.92 DALIAN IRON ORE DCE DCIO MAY6

338

+3.00

+0.90 SGX IRON ORE FUTURES MAY

40.08

+1.29

+3.33 THE STEEL INDEX 62 PCT INDEX

43.2

-1.30

-2.92 METAL BULLETIN INDEX

43.65

-1.60

-3.54

Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.5108 Chinese yuan)

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