Rebar Pares Monthly Drop on Australian Iron Ore Supply Concern
Steel reinforcement-bar futures gained for a second day, paring a monthly decline, amid concern that supply of iron ore from Australia, the biggest shipper, could be disrupted due to a cyclone.
Rebar for delivery in October rose as much as 1.1 percent to 4,028 yuan ($648) a metric ton on the Shanghai Futures Exchange and was at 4,017 yuan at 11:30 a.m. local time. The most-active contract has retreated 2.7 percent this month, the biggest drop since November.
Global steel prices may jump 20 percent as Tropical Cyclone Rusty made landfall in Australia, the Englewood, Colorado-based IHS Inc. said yesterday in an e-mailed report. Iron ore in Australia was quoted at $191 a ton on Feb. 19, and “in an extreme scenario wherein Rusty causes major damage to Australia’s mines and seaports, pricing could increase” to $230 a ton in April, according to IHS.
“Investors are worried that cyclone Rusty will reduce iron ore supplies from Australia,” Zheng Ge, an analyst at Wanda Futures Co., said in a report today.
Australia’s Port Hedland, home to the world’s biggest bulk export terminal, escaped with only minor damage from a weakening tropical Cyclone Rusty that’s now moving inland into the Pilbara iron ore mining region.
Iron ore has surged 75 percent from a near three-year low in September as China’s growth rebounded from a seven-quarter slowdown. Iron ore for immediate delivery was unchanged at $151.90 a ton yesterday, trading near 16-month high, according to data compiled by The Steel Index Ltd.
The average spot price for rebar fell 0.3 percent to 3,811 yuan a ton yesterday, according to data from Beijing Antaike Information Development Co.
To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at firstname.lastname@example.org