Iron ore futures rallied high at the morning session, only to ease in the afternoon session and eked out small gains at the close.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE), for September delivery then inched up by 0.81% day-on-day or up RMB 8.50 to RMB 1,060/mt on Monday.
The steel rebar contract on the Shanghai Futures Exchange, however continued to dip since last week and went down slightly by 0.95% or up RMB 49 day-on-day to RMB 5,082/mt.
Wild swings over market outlook
Some trade participants attributed the wild swings of the iron ore futures to mirror the stock market rally in the Shanghai Composite Index, which opened high and gained 1.49% on Monday.
However, the earlier DCE rally was also influenced by better global steel demand and high Chinese steel production despite strict emission control policies implemented in Tangshan.
According to National Bureau of Statistics, China produced 74.75 million mt of pig iron and 94.02 million mt of crude steel in March, up 9% on-month and 19% on-year.
The monthly March production was also at a six-month high despite the ongoing output curb in Tangshan, as the high steel margins had boosted output elsewhere in the country.
Steel prices to gain slightly for the week
Chinese rebar steel prices are expected to inch up slightly with small gains over the Apr 19-23 period, due to lower steel inventory among 132 Chinese cities.
According to Mysteel, the rebar stocks had dropped for the sixth consecutive weeks by mid-April, thus there was still room for upward movement for rebar prices, though rising at a slower pace.
Meanwhile, the Tangshan billet prices slid at the start of week to RMB 4,940, down RMB 20 day-on-day, after flattening throughout last week. As the higher Chinese steel production put pressure on further steel billet prices upticks, amid good steel margins.