BEIJING: Spot iron ore prices in China, the world's biggest consumer, were hardly changed on Friday as traders braced themselves for a subdued market ahead of the Lunar New Year holiday in January.
Chinese consultancy Umetal said 61.5 percent Pilbara fines were being offered at $132-134 per tonne on Friday, including cost and freight, down from $134-136 on the previous day.
The most traded May steel rebar contract on the Shanghai Futures Exchange bounced back during the Friday morning session, rising 0.65 percent to 4,151 yuan per tonne after Thursday's 0.7 percent decline.
Traders said market activity was winding down, and no positive signals were expected in the coming weeks to offset the seasonal lull in construction activities across the country.
"There are a lot of issues in the market right now and only one of them is the winter," said an iron ore importer based in the eastern coastal province of Zhejiang.
"The main issue is the government is still not releasing any money into the market and everyone is cautious -- they won't buy a lot of stock because they don't know the future," he said.
Steel mill ore stockpiles remain relatively high after a buying spree in November that pushed imports up to a ten-month high of 64.2 million tonnes.
Iron ore with 62 percent iron content fell $1 on Thursday to
end at $133.80 a tonne, cost and freight delivered to China, its lowest since Dec. 1, according to the Steel Index.
The China Iron and Steel Association (CISA) did nothing to lift the gloom, warning in its monthly market report on Friday that steel demand was expected to decline further in the coming weeks, blaming the worsening economic climate at home and abroad as well as the plunging temperatures.
November crude steel output reached a 14-month low of 49.88
million tonnes, and CISA said steel mills were continuing to slash output in order to support prices, which would at least ease oversupply in the coming weeks.
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