Iron ore futures increased on easing of steel output curbs, and higher steel prices that improved mills’ margins.
The futures of Dalian Commodity Exchange (DCE) for January delivery then rose by 7.81% day-on-day or up RMB 42.50 to RMB 587/mt, during the day trading session on Tuesday.
The rebar futures however, inched down by 0.09% day-on-day or down RMB 4 to RMB 4,315/mt, during the day trading session.
Better market outlooks from relaxation of output curbs
Market sentiments improved with easing of environmental controls in Tangshan, which increased steel productions and demand for raw materials.
In the meantime, the Tangshan billet prices also hiked up by RMB 40 to RMB 4,260/mt on Tuesday afternoon, while domestic rebar prices traded high at RMB 4,754/mt levels since the start of the week.
However, some trade participants expected the recovering iron ore shipments to put some downward pressure on prices, as Mysteel recorded a total iron ore shipment of 25.8 million mt from Australia and Brazil during Nov 15-21, up 19.6% on-week.
Competitive exports and more mills to increase output during December
Chinese exports of HRC and CRC remained active in the export markets, due to competitive pricing and recovery from slow exports activities in previous weeks.
However, the steel exports may pick up toward end-November due to better cost controls from mills that allowed steel products to compete in exports market, according to Mysteel.
However, the steel imports had slowed considerably, while more Chinese mills were planning to ramp up output in December, in view of better demand and less stricter curbs that restricted output.