Iron ore futures closed the day on slight gains, supported by high steel prices, despite a choppy session.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE), then went up slightly by 0.61% day-on-day or up RMB 6.50 to RMB 1,068/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange, also rose slightly by 1.06% or RMB 50 day-on-day to RMB 4,785/mt.
Higher iron ore shipping volumes from miners
The dip in iron ore futures may reflect improving supply from major miners as they ramped their exports last week, with little impact from unfavorable weather conditions.
According to Platts cFlow data, the iron ore seaborne shipments from major miners, had increased by 6.49% on-week to 21.22 million mt over the March 7-13 week.
The iron ore export volumes were shipped from major miners like Rio Tinto, BHP, Vale, Fortescue Metals Group and Roy Hill, as well as from Saldanha port in South Africa.
The weekly export volumes were contributed by significant higher iron ore export from Rio Tinto which reached 6.35 million mt, up 35.44% on-week, as shipments were spared from any unfavorable weather such as cyclone.
Meanwhile, Vale’s iron ore shipment also increased by 3.4% on-week to 4.14 million mt, as weather conditions improved amid the rainy season.
Potential easing of output restrictions in Tangshan
There were also market talks of some easing of environmental controls in Tangshan amid improvement in air quality, which lifted market sentiment on iron ore demand.
Trade participants also expected more demand for hot coil rods (HRC) and rebar steel products in near term, due to lower inventories of both products in northern China.
Pellet and lump were also supported by tighter stockpiles in Shandong ports, however some market participants were concerned that the lump premiums may slide later in May, due to less stringent environmental curbs.