Iron ore futures started the week on slight gains against the huge rally seen last week as the market stabilized amid high steel prices.
The futures of Dalian Commodity Exchange (DCE) for September delivery then inched up by 0.93% on-day or up RMB 11 to RMB 1,197.50/mt on Monday.
The steel rebar contract on the Shanghai Futures Exchange, however plunged down by 2.86% or down RMB 165 day-on-day to RMB 5,596/mt.
Cautious procurement after steel prices rally
The slower future growth reflected buyers’ cautious behavior in procurement after the strong price upticks recorded last week.
As trade participants expected more interventions from Chinese regulatory bodies to step in against market speculation of price manipulation, collusion, and irregularities that disrupt market orders.
Nevertheless, the Tangshan billet prices continued to rise by RMB 20 on-day to RMB 5,540 on Monday, despite experiencing an overall price cut of RMB 150 over the weekend.
Rebar prices to inch down in H2 May
Chinese rebar prices may move in downward trend over the May 17-21 period as buyers became more cautious over the recent upticks, according to Mysteel’s survey.
Some trade participants also expected steel prices to slow down in coming weeks as summer seasons approaches, while the early wet season might lower steel demand in southern China.
However, the construction steel products might still have some room to grow as China’s fixed asset investment on property market increased by 19.9% on-year to RMB 14.4 trillion during the Jan-Apr period, based on National Bureau of Statistics data.