Iron ore futures rose for the third consecutive trading day, despite poor economic data indicating slowdown of manufacturing activities in China.
The futures of Dalian Commodity Exchange (DCE) for January delivery then rose by 1.63% day-on-day or up RMB 10 to RMB 624/mt, during the day trading session on Wednesday.
The rebar futures also followed the rally and hiked up by 3.98% day-on-day or up RMB 165 to RMB 4,306/mt, during the day trading session.
PMIs show slowing manufacturing activities in November
China’s manufacturing indicators moved in mixed directions, as the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 49.9 in November, while the official PMI showed a rebound at 50.1 readings for the month.
Despite the rebound of the official PMI readings, the November index was the lowest in 21 months, based on data from the country’s National Bureau of Statistics.
The poor indicators were linked to subdued demand, shrinking employment and elevated prices that affected manufacturing activities, though the Chinese government intervened to curb high raw material prices and eased the power shortages during November.
More Chinese steel products go to Southeast Asian market
Southeast Asian market remained the top destination for Chinese steel exports, according to China Iron & Steel Association (CISA).
Based on CISA data, Southeast Asian buyers bought 16.8 million mt of Chinese steel products, up 16.4% on-year over Jan-Oct period. These purchases accounted around 29.2% of the total Chinese steel exports.
Despite the rising exports, the Chinese authority tried to discourage steel exports with the removal of rebate taxes since August 1, 2021, but instead encouraged steel imports of semis to lower the country’s overall steel production in 2021.