Iron ore futures closed higher after a late rally at the afternoon session, as more buyers entered the market with rumors of declining port inventory.
Thus, the most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange rose by 0.73% or RMB 6 day-on-day to RMB 828.50 per tonne on Wednesday after opening lower at the morning session.
However, the steel rebar contract on the Shanghai Futures Exchange remained almost flat and inched down by 0.43% or RMB 16 day-on-day to RMB 3,726 per tonne.
New round of environmental measures for Tangshan
Around 19 steel mills were heard to shut down their sintering and pelletizing capacities in Tangshan to comply with new round of environmental control measures.
Some market participants foresee lower steel production amid the stricter output restriction which may promote more usage of lump and pellets.
According to trade source, most mills still prefer to seek for pellets from domestic sources as they were cheaper and easily available, while there is plenty of lump stocks at the ports.
China becomes net steel importer again
China imported a total of 2.46 million mt of semi-finished carbon steel products in July, up 4% month-on-month and became the net steel importer for the second consecutive month since June 2020.
The rising imports reflected high construction demand for the country’s infrastructure and property sectors that were stimulated by monetary and fiscal policies.
For the month of August, China is likely to remain as net steel importer though at a lower volume compared to July, due to better export orders as global economies recovered gradually from the coronavirus pandemic.