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Your current location :Home > News > Iron-ore nears 15-month high tops $150t on China demand outl

Iron-ore nears 15-month high tops $150t on China demand outl

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SINGAPORE - China steel futures hit their highest in more than six months on Monday, backed by a revival in demand in the worlds top steel consumer that has fuelled a buying spree for raw material iron-ore and lifted prices to levels last seen in October 2011.

Baoshan Iron and Steel, Chinas biggest listed steelmaker, said it will raise prices for key products for a third straight month in February, reflecting rising raw material costs and a better outlook for steel demand.

Chinas recovering economy is largely behind the optimism. Data last week showed manucturing activity in the worlds No 2 economy was at its strongest since May 2011.

Many are expecting improved demand for steel in the first quarter so most mills continue to produce at full scale and there has been somewhat a shortage of spot iron ore cargoes in the market, said a Shanghai-based iron-ore trader.

Most iron-ore cargoes sold via spot tenders had been snapped up by big traders anticipating a further run-up in prices, spurring caution among mills wary of rising raw material cost.

The most-traded rebar contract for May delivery on the Shanghai Futures Exchange touched a session high of 4 047 yuan ($650) a ton, its loftiest since July 6. By the midday break, it was up 0.6% at 4 013 yuan.

Prices of rebar, used in construction, have rebounded by over a quarter from September lows. But iron-ore has r outperformed steel, surging 77% since hitting three-year troughs in September.

Benchmark iron-ore with 62% iron content .IO62-CNI=SI jumped 2.3% to $153.30/t on Friday, the highest since mid-October 2011, according to Steel Index. Rising prices of iron-ore, particularly those from top supplier Australia, are prompting some Chinese steelmakers to look for cheaper cargoes elsewhere.

We are getting more enquiries from clients asking whether we have cheaper iron ore from other sources which they didnt consider in the past, said another trader from Shanghai.

Theyre looking for cargoes from Malaysia, Indonesia and some South American countries like Mexico and Chile because theyre trying to reduce their cost.

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Creamer Media,Iron-ore nears 15-month high tops $150t on China demand outlook.