Iron ore futures retreated despite the return of trade participants from holidays season and record-high steel prices.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE), then dropped by 0.61% day-on-day or down RMB 6 to RMB 971/mt on Monday.
The steel rebar contract on the Shanghai Futures Exchange, however surged up by 2.05% or up RMB 104 day-on-day to RMB 5,180/mt.
Steel prices to go higher in April
Chinese steel prices are expected to rise further in April with supports from high steel consumption, amid traditional peak construction seasons.
According to Mysteel, China’s monthly steel consumption is expected to increase further by 10% on-year in April, in view of the many construction projects that had been rolled out over the next three months.
So far, the Tangshan billet prices had reached an almost twelve and half year high over the RMB 5,000/mt mark since early April, while the domestic rebar prices also reached nearly a ten year high at RMB 5,015/mt as of Apr 2.
Minimum impact from IOC’s force majeure declaration
Market participants saw little impact from the force majeure declaration by The Iron Ore by Company of Canada (IOC), due to fire incident in one of its port facilities during end-March.
Some trade sources claimed that the reportedly damaged berth might need around two months of repairs work, while IOC stated that it will work closely with customers to minimize disruptions with market updates.
In the meantime, most of buyers are seeking for higher grade brands like Brazilian Blend fines, Newman fines and PBF to improve efficiency in blast furnace.