Iron ore futures continued to slide on downward direction, as trade participants expected further steel output cuts for winter season.
The futures of Dalian Commodity Exchange (DCE) for January delivery then dipped by 5.92% day-on-day or down RMB 46 to RMB 731/mt, during the day trading session on Wednesday.
The rebar futures also went down by 4.69% day-on-day or down RMB 267 to RMB 5,421/mt, during the day trading session.
Lower iron ore imports in September
Market sentiments for iron ore demand remained low amid the ongoing steel output curbs, which resulted in lower iron ore imports in September.
During the month, China imported a total of 95.61 million mt of iron ore, down 1.93% on-month as raw material demand fell, due to the stringent steel output restrictions.
Overall, the country’s iron ore import of Jan-Sep fell by 3% on-year to 842 million mt of iron ore, according to Chinese customs.
Market cautious of procurement before winter output curbs
Buying interests of iron ore cargoes were also lowered due to market expectation of winter output restriction being issued in 1-2 weeks, according to trade sources.
Market participants were divided on whether a looser approach of steel production curbs will be introduced, or a stringent one as Chinese authority wants to keep steel production beneath last year level.
Nevertheless, the rebar margins remained decent at an average of RMB 801/mt in September, after a monthly gain of RMB 393/mt, and such good margins may continue toward year-end and incentivized stable production for rebar.