Iron ore futures closed the day session in slight dip, after seeing rally in morning session over market concerns over supply tightness in port inventory.
The futures of Dalian Commodity Exchange (DCE) for September delivery then dipped slightly by 0.17% on-day or down RMB 2 to RMB 1,203/mt on Friday.
The steel rebar contract on the Shanghai Futures Exchange however, went up slightly by 0.16% or up RMB 8 day-on-day to RMB 5,061/mt.
Chinese port inventory drops to a five-month low
Iron ore port inventory declined to a low level, as Mysteel recorded a total of 120.9 million mt of iron ore by June 17, down 2.3% week-on-week and following a third consecutive weeks of lower port stockpiles.
According to Mysteel’s data, the port inventory level was also at a five-month low level, despite some improvement in shipments from Brazilian and Australian miners in June.
The supply tightness situation then had brought some price supports to popular iron ore products like PBF, while Carajas fines were also heard to be in short supply among the port stocks.
More steel inspections ahead for mills
Trade participants also expected the Chinese authorities to conduct more emission controls measures outside of Tangshan over the near term to comply with stricter environmental regulations.
These measures then might tighten steelmaking supplies even more and supported further upticks in steel prices.
Meanwhile, more safety inspections on Chinese mines were also expected following the recent mining accident in Shanxi. Trade sources believed that these inspections might restrict mining output and cause some price upticks to domestic raw materials.