Iron ore futures moved flattish on Wednesday, after a slump at previous night market and closed for a slight gain at the afternoon trading session.
The futures of Dalian Commodity Exchange (DCE) for September delivery then inched up by 0.79% day-on-day or RMB 9.50 to RMB 1,219.50/mt during the day trading session on Wednesday.
The rebar futures also increased by 2.86% on-day or up RMB 155 to RMB 5,580/mt, during the day trading session.
CISA foresees slow steel demand in H2 2021
The flat movement in the paper market reflected slowing steel consumption in China, as China Iron and Steel Association (CISA) expected a slowdown of construction activities due to unfavorable weather during H2 2021.
The association stated that the softening of steel demand was caused by hot and rainy weathers in a speech, during the virtual event of Singapore Iron Ore Forum 2021.
However, steel prices remained relatively high as the Tangshan billet prices climbed by RMB 20 day-on-day to RMB 5,120/mt, as market participants anticipated further output cuts to be rolled out by the Chinese authority.
Lower daily crude steel output recorded in early July
Chinese daily crude steel output dropped by 5.6% or 125,853 mt per day to an average of 2.14 million mt per day over the Jul 1-10 period, according to CISA.
The latest daily output was lowered than CISA’s previous estimate at 2.99 million mt per day, as mills cut down their operation prior to political party celebration in Jul 1 and resumed production much later.
Going forward, the daily output figure is expected to decline as market participants anticipated more production cuts to comply with stricter emission regulations in near term.