Iron ore futures closed on higher note after a late rally at the afternoon session to recoup losses from the earlier session.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE), for September delivery then rose by 1.38% day-on-day or up RMB 15 to RMB 1,100.50/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange, also hiked up by 1.45% or up RMB 74 day-on-day to RMB 5,188/mt.
BHP joins Vale and Rio Tinto in lower quarterly iron ore output
Market participants expressed concerns over lower iron ore output from mining majors like Vale, Rio Tinto and BHP.
After BHP reported a dip in iron ore quarterly productions at 66.7 million mt down 2% on-year, but maintained its annual output guidance unchanged at 245-255 million mt.
The lower third quarter production was attributed to the maintenance of mining complexes in South Flank project and bad weather. Despite of the lower quarterly output, BHP expected its annual iron ore production at the upper end of its forecast.
Meanwhile, some trade participants expected better iron ore productions from the mining majors in Q2, due to better weather conditions in Brazil and Australia.
Chinese flat steel exports rise during Q1
Chinese steel market remained robust and recorded rising flat steel exports of 11.4 million mt in Jan-Mar 2021 period, up 29% on-year, according to the country’s General Administration of Customs.
The higher flat steel exports indicated recovering oversea steel demand and accounted nearly 64.5% of China’s total finished steel exports.
However, some trade participants were concerned that the steel exports will dip in coming quarters due to output restriction and strict emission controls imposed by the Chinese authority.
There were also some market talks of relaxation of output restrictions on the sintering plants in Tangshan, which might increase steel production in near term.