Iron ore futures rallied at the day session, as trade participants returned from the long public holidays in China.
The futures of Dalian Commodity Exchange (DCE) for January delivery then rose by 3.72% day-on-day or up RMB 24 to RMB 668.50/mt, during the day trading session on Wednesday.
The rebar future also jumped up by 2.93% day-on-day or up RMB 161 to RMB 5,656/mt, during the day trading session.
More room of improvement for rebar
The long steel prices were expected to strengthen over the Sep 22-24 period, despite mixed market outlook and stringent output cuts imposed in the Jiangsu province.
However, some trade participants expected some price upticks due to the low rebar stocks among commercial warehouses that were in declined for almost two-months.
Meanwhile, the rebar production was also down for the second consecutive week at 3.07 million mt by mid-September, which may support further price upticks.
DCE shield from contagion effects of Evergrande’s debt
The DCE saw minimal effect from the property giant’s possible default of $300 billion, though the morning session suffered slight losses at the close.
Some trade participants believed that state fund houses had entered the paper market with buying activities to shore up investors’ confidence and stabilize the market.
Though, there was no official statement on this, but if true, the paper market is likely to experience some prolonged gains over near term, as state fund tend to buy in batches to uphold market movements.