Nov. 14 (Bloomberg) -- Iron ore may extend its increase this month as steelmakers in China, the world’s biggest consumer, return to the market, said Michael Heffernan, a client adviser with Austock Securities Ltd.
Ore for immediate delivery may climb as high as $150 a metric ton by Dec. 31, according to Heffernan. That’s 8.9 percent more than $137.70 on Nov. 11 and a 27 percent increase from the end of October, The Steel Index Ltd. data show.
“The current recovery is a reaction to the decline last month,” he said in phone interview from Melbourne. “It comes down to sentiment. You can detect a more positive air in the market than there was earlier this year.”
China, the largest steelmaker, cut imports of iron ore to an eight-month low of 49.9 million tons in October, 18 percent less than the 60.6 million tons in September. The country’s economy grew at the slowest pace since 2009 in the third quarter on weaker export demand and monetary tightening as steel prices dropped to a 10-month low. Angang Steel Co. and smaller producers in Hebei province shut plants for maintenance.
The plunge in prices spurred some buying by steelmakers to replenish stockpiles, said Umetal.com analyst Xu Guangjian.
“There was probably a bit of an over-correction last month, so the market has responded,” said James Glenn, commodities analyst with National Australia Bank Ltd. in Melbourne. “Buyers had been sitting back and now they’re seeing an opportunity to take advantage of the lower price.”
Rates may hover from $130 to $140 a ton for the rest of the year, said Glenn. Iron ore for immediate delivery at Tianjin port gained $2.90, or 2.2 percent, to $137.70 on Nov. 11, according to a price index compiled by The Steel Index Ltd.
Steel-product exports from China climbed 11 percent to 41 million tons in the first 10 months, while iron ore imports gained 11 percent to 557.9 million tons.
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