Iron ore futures dipped at the start of the week, after a sluggish trading session with flat steel prices movement and expectation of more production curbs.
The futures of Dalian Commodity Exchange (DCE) for September delivery then went down by 1.49% day-on-day or RMB 18.50 to RMB 1,225/mt during the day trading session on Monday.
The rebar futures, however inched up by 0.78% on-day or RMB 43 to RMB 5,568/mt, during the day trading session.
More Chinese mills to adopt ultra-low emission reforms
The low iron ore paper market was a reaction to China Iron and Steel Industry Association (CISA)’s draft framework on emission control and carbon peak goals in iron and steel industry.
The association had just submitted a report on Saturday, citing 237 steel-related firms have completed or implementing ultra-low emission reforms in their industrial premises, accounting around 650 million mt of crude steel production capacity or 61% of China’s crude steel output capacity.
Some trade sources expected more mills to join the list to comply with stricter emission control during the second half of the year.
Lower blast furnaces utilization rates among Chinese mills
Some Chinese mills had also reduced their capacity utilisation rates of blast furnaces ahead of impose production cuts by Chinese authority.
According to Mysteel, the capacity utilisation rates of blast furnaces of 163 steel mills had dropped to 76.81% as of July 16, lower than the 77.61% recorded in previous week and 85.6% level recorded for the same period last year.
Besides output cuts, trade participants also expected the Chinese authority to exercise more power on controlling commodity prices during the second half of the year.