Reuters reported that spot iron ore was unchanged on December 18th Tuesday, holding at a more than 5 month high that was hit after a two week rally, although a slowdown in steel price gains this week in top consumer China may prompt buyers to curb new orders.
The swift rally in iron ore up almost 13% in the last 10 sessions may also dent buying interest for the steelmaking ingredient from Chinese mills.
According to data provider the Steel Index, the benchmark index for 62% grade iron ore. IO62-CNI=SI stood unchanged at USD 132.2 a tonne on Tuesday, its highest level since mid July that was first hit on Monday.
Iron ore prices have been boosted by an improved outlook for demand from China as growth revives in the world's second largest economy, while worries supplies may be tight in the Q1 due to seasonal cyclones and rain in top exporters Australia and Brazil have also supported.
Mr Christopher Ellis an analyst with Metal Bulletin Iron Ore Index, one of the three major global indices providers said that "I think the rise is fairly speculative at the moment. Although the outlook has definitely picked up over the last month, we feel it does not justify the size of the rise in spot prices over the last couple of weeks."
Mr Elli said that "The gains have also been on the back of relatively thin transacted volumes in the spot market which tells us that only a limited part of the Chinese market is able or willing to buy at the relatively high prices."
Some market participants said that the USD 135 a tonne level could be the ceiling for iron ore prices in the coming weeks. A drop off in steel price gains this week should also cap iron ore.
