Iron ore futures moved flattish since opening and closed lower in the afternoon session as market cooled down after recent rally.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE), for September delivery then dipped slightly by 0.46% day-on-day or up RMB 5 to RMB 1,091.50/mt on Thursday.
The steel rebar contract on the Shanghai Futures Exchange, however rose slightly by 0.97% or up RMB 50 day-on-day to RMB 5,208/mt.
More steel imports to ease billet prices in April
The decline in the paper market may be linked to flattish steel prices as the Tangshan billet prices stabilized at around RMB 4,940, unchanged in almost span of three days.
Furthermore, China is expected to increase imports of semi-finished steel products like billets in April, which may ease further price upticks as most of the imports consisted of billet products.
According to Platts, China imported about 668,000 mt of semi-finished steel products in March 2021, up 26% on-year, and this import volume is slated to rise in April, in view of extended output curb in Tangshan.
China’s scrap imports rise during Q1
Beside the higher semi-steel imports, China also imported more steel scrap in Q1 2021 that doubled against the full-year scrap import for 2020.
According to the country’s General Administration of Customs (GACC), China imported at total of 55,389 mt of steep scrap during Jan-Mar 2021 period, much higher that the import of 3,366 mt recorded in Q1 2020 and annual import volume of 27,000 in 2020.
The high scrap imports were due to better steel margins enjoyed by steelmakers as they ramped up production outside of Tangshan, which is subjected to strict emission controls.