Iron ore futures opened high before losing the upward momentum toward closing and resulted in flattish movement.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange inched up by 0.44% day-on-day to RMB 793.50 per mt on Thursday.
The steel rebar contract on the Shanghai Futures Exchange was almost flat and saw a small gain of 0.28% day-on-day to RMB 3,642 per mt.
Slight uptick in daily crude steel output
China’s daily crude steel output rose slightly by 8,700 mt/day week-on-week to an average of 2.94 million mt/day for the first ten working days of October after the Golden week holidays.
According to Mysteel, the higher output were due to resuming production of electric-arc-furnace (EAF) steel producers across China after finishing their maintenances.
However, the country’s production of iron ore concentrates fell by 2.5% month-on-month to 24.3 million mt in September, but up 4.3% on yearly basis.
Thus, China produced 200.85 million mt of iron ore concentrates over the Jan-Sep period, up 0.6% on-year, based on data from Mysteel.
Lower steel stocks from better buying activities
According to Mysteel, China’s total trader steel stocks had dropped 1.1 million mt or 5% week-on-week to 20.7 million mt as of Oct 22.
The steel stocks comprised of rebar, wire rod, medium plate, hot-rolled and cold-rolled coil from five major Chinese traders.
Based on Mysteel’s data, the steel stocks had declined for the second consecutive weeks due to better buying interests after the Golden week holidays.
However, the China Iron & Steel Association (CISA) expects steel prices to soften gradually as the winter season approached, which resulted in lesser construction activities and lowered steel consumptions.