Iron ore futures dipped on slow steel demand, despite better economic indicator in the Chinese property sector.
The futures of Dalian Commodity Exchange (DCE) for May delivery dipped by 4.61% day-on-day or down RMB 36.50 to RMB 756/mt, during the day trading session on Tuesday.
The rebar futures also decreased by 0.81% or down RMB 39 day-on-day to RMB 4,753/mt, during the day trading session.
Better growth in the Chinese property sector
The Chinese property sector saw some improvement as the country’s fixed asset investment (FAI) rose by 12.2% year-on-year to RMB 5.1 trillion or $793 billion, according to China’s National Bureau of Statistics.
Under the FAI, the investment in Chinese property sector grew by 3.7% year-on-year, indicating some recovery, though some property developers were still struggling with debt issues.
In the meantime, the market is preparing for the peak construction season in near term, though there seemed to be lesser new property projects this year.
Growing interests for lower grade iron ore products
There were some growing interests on lower quality medium grade fines like Jimblebar Fines, and low-grade fines, such as the Super Special Fines, especially among the Eastern China steelmakers.
This was due to thinner steel margins and thus more mills were keen to save costs and procured the more competitively priced iron ore grades.
Some of them were also concerned that the Russia-Ukraine conflict will impact the high-grade iron ores like Carajas fines as European end-users avoid raw materials from Russia and sourced from Brazil instead for the higher Fe materials.