Iron ore futures rallied on better steel margins and rode on global market optimism due to Covid-19 vaccine breakthrough.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange rose by 1.66 % or RMB 13.50 day-on-day to RMB 825.50 /mt on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange however, went down slightly by 0.31% or RMB 12 day-on-day to RMB 3,826/mt, probably due to concern over slower steel demand in winter.
Better support from high steel prices
China’s rebar price continued to rally on better downstream domestic demand and reached a 11-month high.
According to Mysteel, the price of HRB400 20mm dia rebar rose for the ninth consecutive day by RMB 115 day-on-day to RMB 4,070/mt as of Nov 9.
Likewise, the Tangshan billet prices also continued to rise further by RMB 10 to RMB 3,580 on Nov 10, due to strict sintering cut and trucking restriction being imposed in Tangshan.
The higher steel prices had improved margins recently and resulted in flurry of spot purchases for iron ore cargoes.
However, there was some concerns over dip in weekly shipments, as both Australian and Brazilian weekly shipments dropped to a seven-month low at 21.4 million mt over the Nov 2-8 period, down 22% on weekly basis.
WeChat trading to come online in 2021
Brazilian mining giant, Vale had cooperated with Beijing Iron Ore Trading Center Corporation (COREX) to launch RMB-priced trading platform via WeChat App in early 2021.
This will be the first joint efforts between miner and trading platform to digitalize their business-to-business or B2B trading through a popular social media app like WeChat.
WeChat currently boasts over 1 billion monthly active users, equipped with digital payment services, while COREX electronic trading system accounted trading deal volumes over 226 million mt worth around US 17 billion up to June 2020, in providing e-commerce channel for both domestic and foreign iron ore trade participants.