Iron ore futures rose on Friday trading session, as steel consumption increased, and market participants anticipated more stimulus measures during H2 2021.
The futures of Dalian Commodity Exchange (DCE) for September delivery then went up by 1.89% day-on-day or RMB 23 to RMB 1,241/mt during the day trading session on Friday.
The rebar futures also inched up by 0.23% on-day or RMB 13 to RMB 5,559/mt, during the day trading session.
Low steel stocks among Chinese mills
Chinese mills’ steel stocks had dropped for the second consecutive week, due to better steel consumption.
As Mysteel recorded total steel stocks at 6.3 million mt during July 8-14 period, down 3.7% week-on-week, after surveying 184 mills across the country.
Beside better steel demand, some mills had dispatched their steel stocks to traders’ warehouses during the week, with transports carrying rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plates.
Higher imports of iron ore fines toward mid-July
Chinese mills’ daily steel consumption had reached 316,300 mt per day among the major 64 steelmakers over the July 1-14 period, up 139% fortnightly, according to Mysteel.
Similarly, the imported iron ore sintering fines among these 64 large mills had also increased by 3.4% fortnightly to 16.09 million mt, especially for mills located in northern China’s province like Hebei.
The high import and daily steel consumption rate were due to the relaxation of output cut in early July, though many trade participants expected tougher production cut ahead to comply with green initiative.