Iron ore futures reversed into losses due to the easing of the supply tightness, while the market entered lull steel demand season.
The futures of Dalian Commodity Exchange (DCE) for September delivery then dipped down by 1.52% on-day or RMB 18.50 to RMB 1,197.50/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange, however dropped by 1.47% or down RMB 77 day-on-day to RMB 5,168/mt.
More shipments from Australia and Brazil
According to Mysteel, the total iron ore shipment from Australian and Brazilian miners went up for the second consecutive week to 26 million mt over Jun 7-13 period, up 4.4% on-week.
The increased shipment from the miners had eased market concerns over supply tightness with low port inventory in China, though the market had entered its traditional lull demand season with rainy weather that affected construction activities.
However, some trade participants expected further upticks in steel prices due to stricter environmental protection measures being imposed in Tangshan, and more of these stringent measures may apply to other steelmaking hubs in China.
Mainstream fines remain firm favorite among Chinese mills
Most Chinese buyers focused their purchases on mainstream fines like PBF, which was in short supply among port stocks, though many trade participants expected better shipment arrival in June.
The preference for mainstream fines and high-grade fines were due to improving margins for flat steel products, while there was less demand for low grade fines, as most mills did not switch over to the low-high combination blast furnace mix yet.
Meanwhile, lump premiums continued to climb due to supply tightness with more buying interests reserved for non-mainstream lump cargoes.