* Mills avoid forward shipments on poor steel demand
* Shanghai rebar gains, tracking other risk assets
(Updates rebar price)
By Manolo Serapio Jr
SINGAPORE, July 3 Benchmark spot iron ore prices
hit three-week lows and bids were scarce on Tuesday as mills
from top buyer China stayed out of the market due to weak demand
Ample supply in the spot market also pressured iron ore
prices as miners continued to unload cargoes, at a time when a
slowing Chinese economy is hurting appetite for steel and
prompting mills to curb output.
"Steel demand will continue to weaken as construction
activity is curbed amid heavy rains in some regions and high
temperatures elsewhere in China," said an iron ore trader in
"So steel mills are trying to avoid making forward
shipments, while traders believe stockpiling is too risky at the
Iron ore with 62-percent iron content .IO62-CNI=SI, the
industry benchmark, slipped 0.4 percent to $133.50 a tonne on
Monday, based on data from Steel Index, dropping for a third day
That was the lowest level for the main steelmaking raw
material since June 12, and some traders see further downside.
"I don't see any reason why it will rebound," said a
Singapore-based trader. "It's looking very negative out there.
We're clearly seeing a trend of more and more tonnes coming into
the spot market and demand is not changing."
Over recent months, Brazil's Vale has been the
most aggressive in selling spot cargoes to China.
A Hong Kong trader estimated that the world's top iron ore
supplier sold between 800,000 tonnes and 1 million tonnes of
iron ore in the spot market each week last month, outpacing
Australian miners such as BHP Billiton which
may have sold less than half of that volume in a week.
Rio Tinto is selling 160,000 tonnes of
61.5-percent grade Australian Pilbara iron ore fines at a tender
on Tuesday, traders said, and expectations are for prices to
A cargo of Pilbara iron ore fines was sold via the platform
run by the China Beijing International Mining Exchange on
Tuesday at around $137 a tonne, said another trader in
Singapore, higher than current market offers of $134-$135.
"It doesn't make sense. We're offering Australian cargoes at
substantially below that, about $4-$5 below that," the trader
"It seems like there are people out there who have an
interest in keeping this market up and intentionally pay above
Shanghai steel rebar futures rose on Tuesday after two days
of losses, although the gains were more in line with other risk
assets as bleak global manufacturing data raised hopes central
banks around the world would act to stimulate economies.
The most active rebar contract for October delivery on the
Shanghai Futures Exchange gained 0.8 percent to close at
4,078 yuan ($640) a tonne, after hitting one-month lows on
Shanghai rebar futures and iron ore indexes at 0724 GMT
Contract Last Change Pct Change
SHFE REBAR OCT2 4078 +34.00 +0.84
PLATTS 62 PCT INDEX 135.25 +0.00 +0.00
THE STEEL INDEX 62 PCT INDEX 133.5 -0.50 -0.37
METAL BULLETIN INDEX 134.4 -1.09 -0.80
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.3488 Chinese yuan)
(Additional reporting by Ruby Lian in SHANGHAI; Editing by
Clarence Fernandez and Joseph Radford)