Chinese steel and iron ore futures rebounded on Monday after losses last week, supported by firm export data from China and comments from President Xi Jinping playing down risks faced by the world's No 2 economy. China's exports grew 11.6 percent in October, cooling from a 15.3 percent jump in September but surpassing forecasts for a 10.6 percent increase, government data showed on Saturday.
The next day, Xi told global leaders that while there are indeed risks to the economy, they are "not so scary". The most-traded rebar for May delivery on the Shanghai Futures Exchange closed up 1.1 percent at 2,557 yuan($418) a tonne, after losing 2 percent last week.
The May iron ore contract on the Dalian Commodity Exchange gained 0.8 percent to end at 514 yuan per tonne, after dropping more than 4 percent last week. Spot iron ore prices hit five-year lows on Friday as several Chinese steel producers surrounding Beijing were forced to shut temporarily to limit smog during the Asia-Pacific Economic Co-operation summit in the capital that opened last week.
The curbs helped stretch iron ore's rout that has slashed prices by nearly 44 percent this year. Iron ore for immediate delivery to China slipped 0.1 percent to $75.50 a tonne on Friday, its lowest since June 2009, according to data compiled by the Steel Index. "Everytime we get to the $77 level and below, it seems to bounce back and that's what we'll probably see again today with futures stabilising," said an iron ore broker in Singapore.
"If you'd asked me Friday, I would have said there's strong downside risk, but there seems to be a change of tone in the market today." Australia and New Zealand Banking Group slashed its 2015 iron ore forecast to $78 a tonne from $101, and its 2016 estimate to $85 from $95. It also cut its 2017 projection to $89 from $94. Iron ore prices slumped this year as big, low-cost producers boosted output at a time when China, the largest buyer of the raw material, is slowing down.
But Rio Tinto, the world's No 2 iron ore miner, is unfazed by the drop in ore prices and sticking to plans to raise output, its chief executive said. China's iron ore imports fell to 79.39 million tonnes in October from 84.69 million tonnes in September, data showed. Amid slower demand for steel at home, China's exports of steel products inched up to an all-time high of 8.55 million tonnes last month. "Continued weakness in domestic demand, strong producer margins and inventory deleveraging helped push exports higher," Citi analysts said in a note, adding exports are likely to remain strong over the rest of the year.
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