* Iron ore purchases by China steel mills slow
* Prices seen rangebound as miners, buyers cautious
* China daily steel output up 4 pct early Oct -CISA
* BHP sticks with plan to lift iron ore output
(Adds details throughout, updates rebar price in table)
By Ruby Lian and Manolo Serapio Jr
SHANGHAI/SINGAPORE, Oct 17 Spot iron ore prices
stabilized on Wednesday, as steel mills in top buyer China
slowed purchases of the raw material amid a weak outlook for
The lack of a strong recovery in Chinese steel demand, along
with a persistently oversupplied market, is likely to continue
to weigh on prices, pressuring iron ore.
"I think there is demand from the Chinese to restock, but
both miners and Chinese buyers are going to play a cautious game
not to tip the balance too much either way," said Jamie Pearce,
head of iron ore brokering at SSY Futures, part of the
shipbroking group Simpson Spence and Young.
"So that's going to create some rangebound trading on iron
ore swaps and physicals."
Prices offers for imported iron ore cargoes in China were
steady on Wednesday after the benchmark 62-percent grade iron
ore .IO62-CNI=SI slipped 0.4 percent to $112.60 a tonne the
previous day, according to data provider Steel Index.
Tuesday marked a fourth day of decline for iron ore prices
that last month fell to a three-year low below $87 as China's
slowdown curbed its raw material demand.
Despite rebounding to above $100 since, the price is still
about a quarter below this year's high of $149.40, although top
miners are going ahead with plans to boost output.
BHP Billiton is pressing on with plans to
increase production, as low-cost mining giants carve out a
larger market share and undercut competitors struggling with
slower growth in China.
BHP joins Rio Tinto and Fortescue Metals
Group who are similarly sticking to plans to dig up
more iron ore despite risks stemming from cooling industrial
activity and demand for steel in China.
Chinese steel mills, which produce nearly half of the
world's crude steel output, became cautious after moves to
rebuild stockpiles last week pushed up spot prices to their
highest since July.
Restocking appetite has since waned, with mills stepping
back from the spot market on declining spot steel prices.
"Physical trade has been slow this week because the market
is dropping, so mills are hesitant to purchase, whether it's
spot or forward cargo," said a Shanghai-based iron ore trader.
But China's high steel output may continue to support iron
China's average daily crude steel output stood at 1.92
million tonnes in the first 10 days of October, up 4 percent
from the last 10 days of September, as mills took advantage of
firmer steel prices then to lift production.
Shanghai rebar futures and iron ore indexes at 0740 GMT
Contract Last Change Pct Change
SHFE REBAR JAN3 3638 +27.00 +0.75
PLATTS 62 PCT INDEX 114.75 +0.00 +0.00
THE STEEL INDEX 62 PCT INDEX 112.6 -0.40 -0.35
METAL BULLETIN INDEX 114.7 -0.18 -0.16
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1=6.2640 Chinese yuan)
(Editing by Clarence Fernandez)