Iron ore futures continued to decline as steel demand slowed with market concerns over more output curbs toward the new year.
The futures of Dalian Commodity Exchange (DCE) for January delivery then dipped by 0.65% day-on-day or down RMB 4.50 to RMB 692.50/mt, during the day trading session on Thursday.
The rebar futures, however, went up slightly by 0.56% day-on-day or up RMB 25 to RMB 4,479/mt, during the day trading session.
Daily steel output dips in mid-December
Market sentiment turned bearish due to falling steel output in December, as the Mysteel recorded the country’s mid-December daily steel output to average at 2.36 million mt per day, down 0.3% from early December.
The declining daily output was linked to the ongoing production restriction in steelmaking hub like Tangshan with emergency measures to improve air quality ahead of the Winter Olympic next year.
Despite the low steel consumption, some trade participants remained optimistic of the restocking activities ahead, as steel inventory were heard to be low levels in some of the traders’ warehouses that lend support to higher steel products’ prices.
Growing Chinese interests on Indian pellets
More Indian pellet producers were heard to offer pellet cargoes in the market to meet the rising interests coming from Chinese trade participants.
Chinese mills are expected to start their restocking activities before the Spring Festival by early February next year, this included pellets cargoes for arrival in Jan-Feb 2022 period.
Mills were heard to prefer higher grade pellets with higher ferrous content and lower alumina content, due to the improving mills’ margins.
Besides Indian pellets, Chinese mills were interested in other countries’ pellets products as well, such as coming from Ukrainian and Brazilian pellets.