Money

Iron ore index falls below $150 as Chinese buying fizzles

(Agencies)
Updated: 2010-10-26 13:53
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A key iron ore price benchmark fell below $150 a ton for the first time in two weeks as demand from top market China lost steam although offers stayed firm on Tuesday, Reuters reported.

Offers to sell Indian ore with 63.5 percent iron content ranged from $160 to $162 a ton on Tuesday, cost and freight delivered to China, although there were few bids, traders said.

Inquiries from Chinese steel mills have slowed down, with some taking a breather after the quick surge in prices to near five-month highs earlier this month when the mills returned to the market after a week-long holiday.

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"It is not easy to sell shipments as some mills still have orders to curb production because of the energy-saving mandate," said an iron ore trader in Tianjin in northern China.

Some mills in the steel production hub of Hebei province have resumed production from late September since being ordered by the provincial government to slash output as China raced to meet its year-end energy efficiency target.

But mills in Shandong and Henan provinces have recently been asked to halve output as part of the power-saving campaign.

The Steel Index 62 percent iron ore benchmark fell $2.40 to $149.40 a ton, C&F China, at the end of trade on Monday.

A weak outlook for steel demand for the rest of the year had kept Chinese steel prices mostly steady in recent weeks, prompting some steelmakers to maintain prices for November or cut them to spur demand.

China's Hebei Iron & Steel Group, the country's largest steelmaker by output, has cut prices of its main construction steel products by up to 180 yuan ($27.04) a ton, local media reported on Tuesday.

The price cut followed a move by industry pricing leader Baoshan Iron & Steel earlier this month to keep prices for November bookings unchanged.