Iron ore futures continued to rally on lower import volumes from Australian and Brazilian miners, amid high steel demand in China.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE), for September delivery then rose by 3.28% day-on-day or up RMB 32.50 to RMB 1,022/mt on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange, also hiked up by 2.36% or up RMB 118 day-on-day to RMB 5,116/mt.
Lower iron ore shipment in early April
Australian and Brazilian iron ore imports volume had dropped to 24.04 million mt, down 404 million mt as of April 9, according to Mysteel.
The lower shipments had supported iron prices as most of the end-users were seeking for medium to high grade fines to improve blast furnace efficiency amid output curbs.
Meanwhile, there was less interests for Australian and Indian low grade fines due to the output curbs in China, though some trade sources expected some easing of the production restriction in medium term due to rising raw material costs.
Higher rebar output amid lower daily crude steel production
China’s daily steel output dropped slightly in April due to output curbs and higher number of blast furnace maintenance during early April period.
According to Mysteel, the daily crude steel output recorded at an average of 2.88 million mt per day during the first ten days of April, down 0.4% as compared to late March period.
However, the rebar production grew over the Apr 1-7 period to 3.57 million mt, up 1.1% on-week, due to higher domestic demand and better steel margins.
Despite the high rebar production, some trade participants expected some output declines in near term, following the corrections of rebar prices by mid-April.