Iron ore futures moved flattish in choppy session and spotted a gain after a late rally in the afternoon session.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE), then rose slightly by 0.44% day-on-day or RMB 5 to RMB 1,129.50/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange also went up slightly by 0.81% or RMB 37 day on-day to RMB 4,618/mt.
Slowing down after much post-holidays demand optimism
Market sentiment had weakened after the issuance of pollution alert in Tangshan that led to steel production cut earlier this week.
However, market participants still expect better steel demand ahead despite the output cut, as speculative demand were heard to shift towards April pricing cargoes.
According to trade sources, most buyers prefer medium grade fines like PBF and MAC fines, due to their liquidity as compared to the Brazilian counterpart of BRBF.
Though there is more availability of BRBF, as they were well-stocked up in ports located in Malaysia and southern China.
Domestic rebar prices reach 2-year high
China’s domestic rebar price had rallied to two-year high after the Chinese trade participants returned from the holidays.
The price of HRB400 20mm dia rebar had risen for the fifth consecutive day after the holiday to RMB 4,682/mt on Feb 23, up RMB 26/mt, according to Mysteel’s assessment.
Chinese traders expected construction demand to recover from the lower activities during the holidays period.
Thus, some traders were heard to be restocking iron ore in preparation for the anticipated construction steel demand uptick.