Iron ore futures continued to rise throughout the week on good steel demand from China amid peak construction season.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange rose slightly by 0.88% or RMB 7.50 day-on-day to RMB 857.50 per tonne on Thursday.
Likewise, the steel rebar contract on the Shanghai Futures Exchange saw slight gain at of 0.05% or RMB 19 day-on-day to RMB 3,790 per tonne.
Stable iron ore stocks among Chinese mills
The flattish iron ore futures may imply some slowdown of buying activities as most of the Chinese mills were well-stocked with iron ore products over the past few weeks.
According to Mysteel, the Chinese steelmakers’ iron ore inventory stabilized at 16.5 million tonnes over the Aug 27-Sep 2 period, down by 1.1% on weekly basis.
The tally was based on Mysteel’s survey of 64 steel mills across China and recorded higher daily consumption of imported sintering fines to 626,900 tonnes per day, up 1.6% on-week, as mills ramped up steel productions for the peak construction period of Sep-Oct.
China’s vehicle sales to reach historic high in 2020
China’s vehicle sales may reach a new historic high in 2020, based on high sales volume recorded by China Association of Automobile Manufacturers (CAAM).
According to CAAM, the country’s passenger vehicles’ sales totaled at 2.18 million units, up 11.3% year-on-year in August, while the automobile consumption index also rose to 76.6 readings as compared to 60.3 ratings in July.
Moreover, China’s heavy truck sales totaled to 128,000 units in August, up 75% year-on-year due to growing worksites demand in China.
The high vehicle sales had since pushed up the prices of cold rolled coil (CRC) as CRC spot prices hiked up by 27.5% since May to RMB 4,680/mt as of Sept 1, based on Platts assessment.