Iron ore futures rebounded after a week of losses, as buying interests improved as steel production is expected to recover after the Winter Olympics.
The futures of Dalian Commodity Exchange (DCE) for May delivery then rose by 4.74% day-on-day or up RMB 32 to RMB 707/mt, during the morning trading session on Monday.
The rebar futures however, rose by 2.43% or up RMB 115 to RMB 4,845/mt, during the day trading session.
Less production restrictions after the Winter Olympics
The market upticks can be traced to relaxation of output curbs after the Winter Olympics which officially ended on Feb 20.
Northern China-based mills are expected to benefit directly from the output restrictions as many were placed under stringent production controls to minimize emissions during the Games.
However, there might be some production curb scheduled for the upcoming political meeting of Two Session held in Beijing during March, when the Chinese policymakers might introduce some ‘pro-growth’ policy that boost steel consumptions.
More purchases in ports as compared to seaborne market
Despite market expectation of better steel production, most buyers preferred to purchase from the portside market due to cheaper option.
As buyers would suffer a huge import loss in purchasing of seaborne cargoes, whereas the recent shipments arrival was mostly around 60%, with some quality variations for Jimblebar fines products.
Though, the lumps and low-grade fines like Yandi fines consisted of less import losses among the seaborne import cargoes, which was popular with the buyers.