Chinese futures continued the downward slope since the start of the week, as market participants waited for clearer market directions.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, dropped by 2.99% day-on-day to RMB 698.50 per tonne on Monday.
Similarly, the steel rebar contract on the Shanghai Futures Exchange decreased by 0.48% day-on-day to RMB 3,493 per tonne.
Call for ramp up of domestic mining output
Market participants were concerned over the higher domestic iron ore output which might lower buying interests for seaborne cargoes.
As China Iron & Steel Industry Association (CISA), has called for a ramp up of domestic iron ore production by 20% or more of the total estimated iron ore demand at 1.225 billion tonnes in 2020.
So far, CISA estimated that around 1 billion tonnes were supplied by seaborne import, with the remaining met by domestic mining suppliers.
Thus, by ramping up domestic mining production, the seaborne iron ore market will be less price competitive whereas buyers had more options to choose.
Moreover, CISA suggested using the revenue from value-added tax levied on iron ore imports that amounted to around RMB 90 billion or $12.6 billion annually for investment into domestic mines to raise output.
No disruption on Australian supply from once-in-a-decade storm
No disruption to port operation in Pilbara after once-in-a-decade storm hit Western Australia on Monday, according to Pilbara Port Authority (PPA).
Mining major, BHP reported no major impact to its mining operation in the region, while Rio Tinto declined to comment on the aftermath to its mining operation.
The most affected area remained at Cape Leeuwin, the southern tip of Western Australia, where strong winds with speed up to 132 kilometer per hour swept across the coastal area and caused widespread power outages.