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Dalian, SGX iron ore extend rebound
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Shanghai steel benchmarks advance
(Updates prices)
By Enrico Dela Cruz
March 28 (Reuters) - Iron ore futures extended their
rebound on Tuesday as easing worries about the banking sector
lifted steel price benchmarks in Shanghai, though lingering
concern about demand prospects in top steel producer China
limited gains.
The declining Chinese portside inventory of iron ore also
provided support to the steelmaking ingredient, which hit
oversold levels last week amid concerns particularly about a
drop in construction steel demand.
The most-traded May iron ore on China's Dalian Commodity
Exchange ended daytime trade 1.8% higher at 882 yuan
($128.11) a tonne. It climbed 1.3% in the previous session,
snapping a seven-session slump.
On the Singapore Exchange, benchmark April iron ore was up 1.8% at $122.65 a tonne, as of 0741 GMT.
Regional U.S. lender First Citizens BancShares scooped up
assets of failed U.S. lender Silicon Valley Bank on Monday,
triggering a relief rally in financial markets fearing a deeper
banking sector turmoil. Analysts, however, said worries about a global credit crunch
that could curb economic growth and metals demand, along with
steel mills' low-inventory strategy, production restrictions and
regulatory risks in China, will likely keep iron ore gains in
check.
A weak property market in China, a major demand driver for steel, is also expected to keep sentiment subdued, they said. In the meantime, any decline in iron ore prices may also be limited, especially with the port stockpile in China at its lowest level since early February, based on SteelHome consultancy data. "The market remains sensitive to near term moves in port inventory," National Australia Bank analysts said in a note. Rebar on the Shanghai Futures Exchange rose 0.8%, hot-rolled coil edged up 0.5%, wire rod climbed 1.8%, and stainless steel added 0.2%. Other steelmaking inputs on the Dalian exchange dipped, however, with coking coal and coke down 1.3% and 2%, respectively.
(Reporting by Enrico Dela Cruz in Manila; editing by Nivedita Bhattacharjee)
