Iron ore futures rebounded on Wednesday but was capped around $101 as investors kept a worried eye over the latest Coronavirus situation in China.
Beijing stepped up its containment efforts following a cluster of new cases in Beijing and triggered a selloff yesterday afternoon as investors were worried of a second wave of cases. Iron ore prices rebounded today on robust Chinese steel demand.
According to China Iron and Steel Association, steel production has picked up its pace since the start of Jun at a much faster rate than of the same period last year. This was largely due to steel mills running at near full capacity despite weaker downstream demand as a result of heavy rains in southern part of China.
However, the rebound was largely capped as investors were concerned about the resurgence of coronavirus which would derail China’s already fragile recovery.
Meanwhile Japan’s crude steel output could slump below 80 million tonnes in the year to March due to weak demand. This would be the lowest since 1968. Japan’s steel output totalled 98.4 million tonnes in the preceding 12 months.
Futures in Singapore rebounded a touch in Asia but failed to pick up the pace in London hours as Jul was seen hovering around 101.0 for most of the morning. Jul traded as high as 101.1. Meanwhile Aug and Sep also traded 97.95 and 95.1, respectively.