Iron ore futures continued to rally on Wednesday, though at a smaller increase as seen previously at start of the week.
The futures of Dalian Commodity Exchange (DCE) for September delivery then rose by 2.85% on-day or RMB 37 to RMB 1,337/mt on May 12.
The steel rebar contract on the Shanghai Futures Exchange, also gained by 2.15% or up RMB 130 day-on-day to RMB 6,171/mt.
Good economic data from China
The rising futures reflected the high steel prices, as the Tangshan billet prices showed no sign of slowdown and rose by RMB 100 on-day to RMB 5,770/mt during mid-week.
In the meantime, China’s vehicle sales remained bullish and rose for 13 consecutive months with monthly gain of 8.6% in April, signifying strong recovery from the pandemic.
However, the country’s real estate index dropped by 1.53% monthly, as Beijing policymakers tried to curb speculations on the housing sector with the implementation of property tax.
Tighter supply for Indian low-grade fines
The supply of the Indian fines is expected to be tighter, due to the second wave of coronavirus infection in India that disrupted port operations for exports.
Meanwhile, there was some informal restrictions on Indian shipments to berth in selected Chinese ports, according to trade sources.
However, the low availability of low-grade fines did not dampen the market sentiment as most of the buying interests were focused on medium and high grade fines like PBF and even Newman High grade fines, due to the high steel margins.