Iron ore futures dipped into losses on Thursday, despite opening high at the start of the afternoon session.
The futures of Dalian Commodity Exchange (DCE) then fell by 2.73% day-on-day or RMB 20.50 to RMB 730/mt, during the day trading session on Thursday.
The rebar futures, however, rose by 4.47% day-on-day or RMB 243 to RMB 5,682/mt, during the day trading session.
Mixed outlook for steel demand
Market sentiments for steel demand were affected by recent drop in domestic rebar prices, as the domestic price of HRB400E 20mm dia rebar fell from a four-day rally to RMB 5,412/mt as of Sep 8, down RMB 7/mt.
However, the Tangshan billet prices remained firm and gained by RMB 20 on-day to RMB 5,140/mt as of Sep 9, amid the ongoing steel production cuts.
The mixed outlook was linked to renewed concerns over stringent pandemic measures for truck driver based in North China since Sep 8, with a mandatory 14-day quarantine rule, which might delay and caused disruption to logistics.
High grade fines to gain traction among mills
There were more buying interests for high grade fines, due to the recent prices hikes in coke prices, which mills wanted to reduce coke usage and sought for higher grade fines.
Steel demand also improved in China that led to some restocking activities of iron ore, though there were some price corrections for PBF in Tangshan, but stable pricings in Shandong.
The improved market sentiments also stabilized lump premium, which some trade sources believed to have a reach close to a price floor set by the miners.