Iron ore futures dipped after recent rally, due to market concerns over high materials costs that reduced steel margins.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE), for September delivery then fell slightly by 0.39% day-on-day or up RMB 4 to RMB 1,011.50/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange, also hiked up by 1.07% or up RMB 54 day-on-day to RMB 5,116/mt.
More Australian iron ore shipments from Port Hedland
Trade participants expected further iron ore price upticks in view of more Australian iron ore exports to China.
According to Pilbara Ports Authority (PPA), Port Hedland shipped 38.1 million mt of iron ore cargoes to China in March, up 19.4% or 7.4 million mt month-on-month.
The high exports volume from Port Hedland was due to better weather condition amid the cyclone season, though the March monthly tonnage was still lowered by 2.3 million mt or 5.7% on yearly basis.
Chinese mills gear up for steel exports
China-based steel mills were preparing for more steel exports, despite market uncertainty over proposed cut to steel export tax rebates.
According to trade sources, the Chinese mills were still waiting for further clarifications from the Chinese authorities on tax cut, while preparing for more steel exports opportunities at the meantime.
Previously, Beijing policymakers had urged for more steel imports instead and planned to reduce steel production to comply with stricter carbon emission standards.