Iron ore futures opened high at the start of the week, recovering ground from previous slump last week, as restocking activities picked up among mills.
The futures of Dalian Commodity Exchange (DCE) for September delivery then rose by 2.29% day-on-day or up RMB 19 to RMB 850.50/mt, during the day trading session on Monday.
The rebar futures, however fell by 2.09% day-on-day or RMB 114 to RMB 5,328/mt, during the day trading session.
Restocking ahead of peak Sep-Oct period
Some trade participants expected Chinese end-users to stock up ahead of the traditional construction peak season during Sep-Oct period, due to higher steel consumption.
Thus, Mysteel estimated some price upticks for long steel products like rebar, during the week of Aug 16-20, as it was heard that rebar inventory was at low level among end-users.
However, some of the market optimisms were dampened by low crude steel output for July, based on data from National Bureau of Statistics.
The bureau stated that the country’s crude steel output decreased by 8.4% year-on-year to 86.79 million mt in July, the first decrease after seven consecutive months of rising output, due to the various steel production cuts.
Slower China’s economic indicators recorded in July
The recent economic indicators showed slower growth in China, as the country’s industrial production rose 6.4% year-on-year in July, but lower than market expectations of 7.8% growth.
The latest monthly industrial growth was also slower in comparison to June’s growth at 8.3%, while China’s property investment grew at slower rate during the January-July 2021 period, down 0.9% from the same period last year.
Thus, some trade participants were bearish on economic growth for the month of August, in view of slower industrial activities and the economic impact from the rising Covid Delta infection cases.