Iron ore futures slumped for the second consecutive day as Chinese market regulators toughened their measures on price information.
The futures of Dalian Commodity Exchange (DCE) for May delivery then slumped by 9.98% day-on-day or down RMB 77.50 to RMB 699/mt, during the day trading session on Tuesday.
The rebar futures also went down by 2.76% to RMB 4,728/mt, during the day trading session.
More clampdown on market speculation from false information
Market activities were subdued due to stringent measures against price information fabrication, as regulators like National Development and Reform Commission dispatched team to inspect on iron ore stocks, port inventory and exchange markets to curb unusual price movement.
State-owned firm related to iron ore and steel industries were encouraged by the regulators to stabilize prices and avoid dissemination of false information that led to irregularity to prices.
However, it was heard that some mills kept an optimistic market outlook and are slated to ramp up production after the Winter Olympics and expecting some forms of stimulus or fiscal package from the Chinese authority to boost steel consumption.
More iron ore shipments to ease prices
In the meantime, market participants expected more iron ore shipments to cool the recent rally, as the iron ore exports volume of Port Hedland rose to 48 million mt in January 2022, up 13.6% yearly, according to Pilbara Ports Authority.
Most of the exports accounting 84.3% or 40.4 million mt of iron ore shipments were destinated for China, up 13.8% yearly, while it was followed by the second-placed South Korea that imported 3.1 million mt in January, down 17.1% year-on-year.
Meanwhile, the Southeast Asian market showed huge appetite for Australian iron ores, as Vietnam almost tripled its imports to 525,632 mt during January 2022, as compared to previous import of 178,432 mt recorded in January 2021.