Iron ore futures rose further on falling steel stocks and market expectation of better restocking activities for the upcoming Spring festival.
The futures of Dalian Commodity Exchange (DCE) for January delivery then went up by 3.93% day-on-day or up RMB 27 to RMB 713.50/mt, during the day trading session on Friday.
The rebar futures also jumped by 1.55% day-on-day or up RMB 69 to RMB 4,519/mt, during the day trading session.
Low steel inventory to push for more replenishment
Chinese mills’ steel inventory fell for the sixth consecutive weeks to 4.18 million mt during the Dec 16-22, a three-year low and down 5.4% on week, according to Mysteel.
The low inventory was a result of the ongoing production curbs in China, and the implementation of stricter environmental regulations to improve air quality during the winter season.
Due to the low steel inventory, some market participants expected better restocking activities ahead of the Spring festival next year.
Rising iron ore imports recorded in November
China imported a total of 104.96 million mt in November, up 14.57% on-month, based on the country’s customs data.
The uptick was due to significant higher contribution from Brazilian suppliers as import volumes rose by 33.2% on-month to 26.93 million mt in November, delivering much Carajas fines and lump into China’s shores.
Moreover, Australian iron ore imports gained by 7.88% on-month to 63.01 million mt in November, with high volume of Mac fines being shipped to China.