Iron ore futures slipped up after yesterday rebound amid market volatility, after restocking demand cooled down.
The futures of Dalian Commodity Exchange (DCE) for January delivery then dipped by 0.43% day-on-day or down RMB 3 to RMB 693.50/mt, during the day trading session on Wednesday.
The rebar futures, however, went down by 0.94% day-on-day or down RMB 42 to RMB 4,438/mt, during the day trading session.
Steel output to fall further in 2022
Market uncertainty casted doubts on iron ore demand for the coming new year, as some trade sources expects China’s steel output to fall by 50 million mt in 2022, while the country produced around 1.03 billion mt of steel in 2021.
The falling production was due to Beijing policymakers’ pledge to cut carbon emissions, while the debt-ridden property sector is expected to reduce steel consumption in the new year.
The falling steel output was reflected in the country’s production of rebars, which declined to 231.9 million mt over Jan-Nov period, down 4.1% yearly, according to China’s National Bureau of Statistics.
Growing imports of steel semis recorded in November
China’s import of steel semis reached 1.82 million mt in November, a one year high, due to strong domestic market, according to the country’s General Administration of Customs (GACC).
According to the customs, the November import volume was at the highest level since September 2020, due to better orders’ purchases of steel semis by traders and end-users during the month of September 2021, before arriving later in November.
The high steel imports were also in line with Chinese authority, which encouraged end-users to import more steel products, but reduce steel exports as part of carbon emission curbs policies.