Iron Ore-Shanghai rebar hits record for 4th day, iron ore up

By Manolo Serapio Jr

SINGAPORE Feb 10 (Reuters) - Shanghai steel rebar futures rose to a record for a fourth straight day on Thursday, boosted by surging cost of iron ore as top consumer China resumed buying after a week-long Lunar New Year holiday on expected firmer steel demand.

The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange was up 0.7 percent at 5,159 yuan a tonne by 0235 GMT, just off a peak of 5,161 yuan.

"Whoever's buying rebar futures still thinks steel prices will rise and if that's the case then it will mean that spot steel prices will also rise and mills will have more money to buy raw material," said a Shanghai-based iron ore trader.

Platts' 62 percent iron ore index .IO62-CNI=SI, which global miners Vale and Rio Tinto mostly use in deciding quarterly contract prices, rose $1.50 to a record $188.75 a tonne, cost and freight, on Wednesday.

Tight supply of the steelmaking ingredient has fueled a rally in iron ore prices since the year started, with Brazilian and Australian cargoes hampered by weather problems and Indian exports cut by a ban on shipments from its Karnataka state.

"I think prices will continue to rise. Supply's still tight and unless something changes on that front, gains will be sustained," said the Shanghai trader.

Two other price indexes also rose to near record highs on Wednesday. The Steel Index 62 percent iron ore benchmark .IO62-CNI=SI gained 70 cents to $186.40 a tonne and Metal Bulletin's 62 percent gauge .IO62-CNO=MB climbed 75 cents to $184.11.

Key to further price gains will be an Indian court ruling due in mid-February, when the country's Supreme Court will decide on whether to lift the Karnataka ban, in force since late July.

"The lifting of the ban will definitely lift exports and at some point will at least slow the rally that we have seen," said Christopher Ellis, index analyst at Metal Bulletin.

"The actual impact on prices will depend on the timing of the ban lifting and how quickly the Indian mines can ramp up exports of material." (Editing by Ed Lane)