Chinese mills piled up their inventories for production of crude steel
China, the world’s topmost consumers of iron ore, is demanding for the same at a high range, thus increasing prices of iron ore and the Shanghai rebar to their highest level in the past two months time. Meanwhile, Chinese mills continue with their production of steel and have also increased their stocks of iron ore at the same time. On the other hand, the steel traders too have refilled their stock levels helping the prices of the commodities to regain its normal price after having faced a sheer loss in the first half of the year 2013.
Rebar price rise was followed by continuous gains in Chinese equity market on Thursday, July 11, 2013. Along with it, they also hope that Beijing will implement on the measures to revive the economy of the country which was very disappointing in trade data of June, 2013.
According to the data of Steel Index, ore with a content of 62% iron rose by 0.2% and was at US $123.9/MT on Wednesday, July 10, 2013. An iron ore trader based at Hong Kong said, “Bids in the physical market are still firm. There’s a lack of spot supply from miners and mills are also willing to take up cargoes since they have kept inventories low. I think US $130 is possible given the very aggressive bids we’re seeing in the market. Chinese steel mills who resold some iron ore cargoes earlier when the market was weak may have unloaded more than they should have, limiting current supplies.”
According to the data from the industry, China had produced an average of 2.18 MnT of crude steel by the end of June, 2013, which was a bit less from its highest production record of May, 2013, which was 2.19 MnT.