Singapore (Platts)--31Jan2013/638 am EST/1138 GMT

Seaborne iron ore prices improved for a second straight day as buyers coveted more spot cargoes, and trades concluded at higher levels.

Platts assessed the 62%-Fe Iron Ore Index $2/dry mt higher at $153/dmt CFR North China.

Demand for spot iron ore was still being supported by end-users who either need to procure to replenish insufficient stock levels or who are buying in anticipation of a stronger market to come.

"Bigger mills aren't really lacking iron ore, but there are many smaller ones who still need to purchase for the Chinese New Year holidays," a Guangzhou-based trader said.

A Shanghai-based trader said there are many buy-side participants who feel that the iron ore market will strengthen even more after the holiday period.

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"These buyers are trying to take cargoes now while prices are comparatively lower and hold on to them," the trader said. "We see both mills and traders doing this."

Expectations of better steel performance after the holidays also produced more positive sentiment in the market.

"A lot of people are expecting a strong pick-up in steel after Chinese New Year," a Singapore-based trader said.

In the meantime, rebar futures gained very marginal ground as the most active May contract traded Yuan 13/mt higher on the day at Yuan 4,127/mt ($657/mt), and settled at Yuan 4,114/mt, up Yuan 5/mt from Wednesday.

Physical steel prices inched higher as spot square billet in Tangshan, Hebei was up Yuan 10/mt from Wednesday to Yuan 3,290/mt ($524/mt) ex-stock, a mill source in the region said.

SPOT CARGOES TRADE SIGNIFICANTLY HIGHER

Australian miner Rio Tinto sold a cargo of 61%-Fe Australian Pilbara Blend fines on CBMX at $153/dmt CFR China to Singapore-based trading house Prosperity Steel United, according to trade sources. The 165,000 mt shipment will load February 14-23.

Sources at PSU could not be reached for comment.

Earlier in the day, PSU was also heard to have bought a PB fines cargo at a lower price of $151/dmt CFR China on the CBMX platform, according to traders with access to the platform. The 165,000 mt shipment will load February.

Brazilian miner Vale sold at $161.61/dmt CFR China 64.48%-Fe Iron Ore Carajas fines (IOCJ) Thursday, its third IOCJ spot cargo this year. The 177,250 mt shipment will pass Singapore March 3, and contains 1.37% alumina, 3.43% silica, 0.042% phosphorus, 0.32% manganese, 2.1% loss on ignition and 8.7% moisture.

The miner last sold 64.7%-Fe IOCJ at $152.23/dmt CFR China January 21 to an unknown buyer. That 160,000 mt shipment loaded January 27 from Brazil.

Another Brazilian miner Companhia Siderurgica Nacional offered two cargoes, each 150,000 mt, of concentrate via a spot tender Thursday, according to trade sources.

The first was a 62/61%-Fe Concentrate Sinter Feed shipment that contained 1.5% alumina and 7% silica. The second was a 63.5/62.5%-Fe Concentrate Sinter Feed parcel that contained 1.5% alumina and 6% silica. Both cargoes will load end-February. Although the tender closed at 4.30 pm Beijing time (0830 GMT), it was not known if the cargoes were awarded.

CSN last offered January 15 two identical cargoes of the same specifications and volume, with the 62/61%-Fe cargo to have loaded January 1-10 and the 63.5/62.5%-Fe parcel to load January 27-February 5, both from Itaguai. Trade details for those two cargoes could not be ascertained.

Elsewhere, Singapore-based trading firm Xinsha International sold 70,000 mt of 62.7%-Fe Australian Newman fines to Hong Kong-based trading firm Asia Commodity Shipping Limited at $154/mt CFR Beilun, loading from February 16-25.

The terms and condition for this trade were not known.

--Celestyn Wong, celestyn_wong@platts.com
--Edited by Martin O'Rourke, martin_orourke@platts.com

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