SINGAPORE: Iron ore rose to its highest in more than three months and traders upped offers on Thursday for cargoes for sale to top buyer China, hoping to sustain what has been a gradual increase in prices, with steel demand largely stable.
Market participants were also keeping tabs on the opening of China's party congress that will usher in a once-in-a-decade leadership change, where they hope more pro-growth measures will be launched.
Price offers for imported iron ore cargoes in China rose by $2 to $3 per tonne on Thursday, traders said, after sale tenders the previous day were concluded at higher prices.
Benchmark iron ore with 62 percent iron content rose 0.4 percent to $121.60 a tonne on Wednesday, its highest since July 24, based on data from Steel Index. That marked a third straight day of price gains for the steelmaking ingredient.
"Most takers of cargoes are traders who are trying to keep the market up, expecting some good news for the steel sector to come out from the China congress," said a Shanghai-based iron ore trader.
"There's still demand from mills, but unless they really need the material urgently, they are not really willing to pay higher prices, especially for forward cargo."
A big cargo of Australian 61.5-percent grade Pilbara iron ore fines was sold on Wednesday to a Singapore-based trading firm at $123.01 per tonne, a dollar more than a previous deal for the same grade, the Shanghai trader said.
"Some traders with cargoes in hand are holding offers in anticipation of firmer prices, though in general there is little consensus on direction, particularly among mills," Steel Index said in a note.
Top iron ore miner Vale is selling another 170,000 tonnes of 65-percent grade cargo at a tender on Thursday, while Rio Tinto is offering 75,000 tonnes of South African iron ore concentrate, traders said.
Largely stable steel prices in China and expectations that more measures to stimulate steel demand and the overall economy will be unveiled by China's new leaders have supported recent gains in iron ore prices.
China's outgoing President Hu Jintao warned that corruption threatened the ruling Communist Party and the state, promising political reform as he formally opened the party congress in Beijing.
The most traded rebar contract for May delivery on the Shanghai Futures Exchange was off 0.3 percent at 3,624 yuan ($580) a tonne, but staying near 3,600 yuan where it has been since early October.
But the inability of steel prices to scale higher may have prompted China's leading steel mills to cut daily crude steel output late last month.
China's average daily crude steel output fell 4 percent to 1.926 million tonnes between Oct. 21-31 from the preceding 10-day period, according to data from the China Iron and Steel Association.
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