Chinese futures remained stagnant in the view of the Dragon Boat festival in the Jun 25-27 period.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, were unchanged day-on-day at RMB 771 per tonne on Thursday.
Similarly, the steel rebar contract on the Shanghai Futures Exchange was flat at RMB 3,620 per tonne, in view of the Chinese holidays.
High steel output by mid-June
China’s steel output continued to run at higher rate by mid-June, according to data from China Iron and Steel Association (CISA).
The association recorded a sixth consecutive week increase for its members’ crude steel production in China, averaging 2.142 million mt per day over the June 10-20 period, up 1.6% on-week from early June figures and up 3.7% year-on-year.
Infrastructure and property sectors demand were credited for the rising steel production, which are likely to grow in the second half of the year as well, due to government stimulus programs.
More low and mid grades for Chinese mills
Chinese mills are lowering their targeted iron content in the blast furnace blend to save cost and seek for more low and mid grades ores.
As such, BHP’s products were popular among buyers with good numbers of the Newman fines, Yandi fines, MAC fines and Jimblebar fines being sold ahead of the Chinese holiday at Jun 25-27 period.
Similarly, there was more demand for FMG low grade products as well, especially when FMG cut the discounts for its three fines products like Super Special Fines (SSF), Fortescue Blend Fines (FBF) and Fe West Pilbara Fines (WPF) for July-loading cargoes.
However, there were less popularity for Carajas fines buyers due to high prices, though some trade sources expect Brazilian shipping volumes to improve in 2-3 week’s time and may ease prices by then.