Iron ore futures dipped slightly as market activities slowed down before the upcoming Spring festival holidays, while trade participants were seeking for clearer market directions after the post-holidays period.
The futures of Dalian Commodity Exchange (DCE) for January delivery then dropped by 1.66% day-on-day or down RMB 12.50 to RMB 740/mt, during the day trading session on Monday.
The rebar futures also dipped by 1.10% day-on-day or down RMB 52 to RMB 4,665/mt, during the day trading session.
Rangebound steel prices ahead of holidays season
Mysteel expected steel prices of rebar and wire rod to remain rangebound during Jan 24-30, ahead of the Lunar New Year holidays, due to thin market activity.
As many end-users had finished their restocking activities, though some pockets of smaller purchases were not ruled out for further replenishment of stocks.
Meanwhile, market sentiment was affected by the China’s lower imports of iron ore during December, which reached 86.07 million mt, down 18% month-on-month.
Some trade participants expected low imports volume may continue in 2022, though Beijing policymakers had yet to set crude steel output for the year.
China’s semi-finished steel imports drop in 2021
China’s semi-finished steel imports reached 13.76 million mt in 2021, down 24.5% on-year, according to China’s custom.
The declining imports was due to the higher base recorded in 2020, while the imports of semi-finished steel only saw an improvement in Q4 2021, amid tougher environmental measures and output curbs during the period.
For 2022, the imports of semi-finished steel may increase after the Winter Olympic like in the months of March and April, though the total imports volume is unlikely to exceed 2021 levels.
As Beijing policymakers might introduce more fiscal policies to stimulus infrastructure steel demand during March and April, though the high local government debt level might limit the spending.