Iron ore futures rebounded from previous losses and firmed up over restocking activities for the upcoming new year.
The futures of Dalian Commodity Exchange (DCE) for January delivery then rose by 2.56% day-on-day or up RMB 17.50 to RMB 702/mt, during the day trading session on Tuesday.
The rebar futures, however, went down by 1.41% day-on-day or down RMB 64 to RMB 4,473/mt, during the day trading session.
Restocking activities to push up steel demand
Chinese trade participants were heard to begin their traditional restocking activities for the new year, in anticipation of rebounding steel demand from stimulus packages during the first half of 2021.
However, some trade participants were worried that the higher shipment and high port inventory may place pressures on further price upticks.
As Mysteel recorded higher iron ore export volumes from Australia and Brazil over Dec 13-19 period, reaching 25.8 million mt, up 14.4% on-week, while port inventory hit record high level at 154.4 million mt since early Dec, according to SteelHome.
Higher Australian iron ore exports estimated for 2022
The rising shipments of iron ore was supported by forecast of the Australia’s Department of Industry, Science, Energy and Resources, which predicted higher iron ore export volume in 2022.
According to the department, Australia’s exports of iron ore is expected to rise by 5.5% on-year to 923 million mt in 2022, then further 2.8% yearly rise to 948 million mt in 2023.
The yearly upticks were linked to the recovery of production and exports from Western Australia after bad-weather related factors disrupted supplies in early 2021.
However, some trade participants were skeptical on the rising export volumes due to market uncertainty brought by the Omicron variant pandemic that may affect cargo flows from stricter lockdowns.