Iron ore futures rose on market optimism over positive China’s economic data, though there were some market concerns over the slowing property sector.
The futures of Dalian Commodity Exchange (DCE) for January delivery then hiked up by 2.23% day-on-day or up RMB 15 to RMB 689/mt, during the day trading session on Tuesday.
The rebar futures also went up by 2.19% day-on-day or up RMB 94 to RMB 4,395/mt, during the day trading session.
Good economic data fuels market optimism
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) hiked up to a six-month high in December with reading of 50.9, beating market estimate of 50.0.
The high rating was linked to favorable government policies aimed to increase supply and stabilize prices, though new export orders had fallen at the slower pace during the month.
However, there were some market concerns over dwindling steel demand from the Chinese property sector after the property developer giant, Evergrande’s stock was suspended from trading in stock exchange with alleged $300 billion in liabilities.
Conservative market outlook for steel prices in early Jan 2022
Mysteel had adopted a conservative outlook on steel prices like rebar and wire rod over the Jan 4-7 period, expecting prices to be rangebound for early January 2022.
This was due to slow steel demand from winter season, market concerns on the resurgence of COVID-19 cases in Chinese cities and slowdown in property sector.
On the other hand, some trade participants expected some market upturns during the month, as they expected restocking activities to pick up before the Lunar New Year holidays in early February.