Iron ore futures closed lower at the start of the week, after a high opening but only to slid at the afternoon trading session later.
The most-traded iron on China’s Dalian Commodity Exchange (DCE) then dropped by 3.21% day-on-day or RMB 32 to 966/mt on Monday, dipping after record-high rally last week.
The steel rebar contract on the Shanghai Futures Exchange, also fell by 2.92% or RMB 120 day-on-day to RMB 3,988/mt, after achieving above the $4,000/mt mark last week.
Slower Australian iron ore exports spark supply concerns
The recent iron ore prices rally was partly attributed to supply concerns over escalating trade tension between Australia and China.
According to Commonwealth Bank of Australia (CBA), the Australia’s iron ore exports had decreased around 6.1% for the week ended in Dec 4, in comparison to the previous four weeks, citing supply concerns among Chinese end-users.
The decline in shipment was considered ‘unusual’ for this time of the year, as miners tend to increase shipments during year-end to meet pre-Chinese New Year restocking demand.
More rebar prices correction ahead
China’s rebar prices are expected to lower for the week due to colder weather that slowed construction activities, according to Mysteel.
The steel consultancy foresees more price corrections for rebar and wire rod for the Dec 14-18 period, especially in northern China, where the colder weather made it more difficult to commence building projects.
However, the prices of hot rolled coil (HRC) might strengthen on good manufacturing and automobile demand during the week.