Iron ore futures booked more gains as restocking activities increased in preparation for the upcoming Golden week holidays in October.
The futures of Dalian Commodity Exchange (DCE) for January delivery then rose by 3.89% day-on-day or up RMB 25 to RMB 667/mt, during the day trading session on Thursday.
The rebar future also jumped up by 1.32% day-on-day or up RMB 73 to RMB 5,605/mt, during the day trading session.
Easing concerns over China’s Evergrande’s debt
Market concerns over the China’s Evergrande debt seemed to have eased as the property developer stated that it had reached an agreement with yuan bondholders on an interest payment.
In the meantime, the China’s central bank also pumped short-term into the financial system to bolster market confidence, while Chinese mills were engaging in restocking activities to prepared for the next week-long public holidays in early October.
However, Evergrande’s debt crisis was not out of the woods yet, as the company faced $83.5 million in dollar-bond interest payments due on Sep 23, and later another $47.5 million dollar-bond interest payment due next week.
Some trade participants remained skeptical and expected the mounting debts of the Chinese property giant may be just a tip of the iceberg, with the possibility of other debts issues from other developers as well.
More iron ore shipments from Australia and Brazil
Some trade participants expected some easing of iron ore prices, as Australian and Brazilian suppliers shipped a three-month high volume of 26.9 million mt over Sep 13-19 period, up 4.2% on-week, according to Mysteel’s data.
So far, the two countries had been ramping up their weekly iron ore exports for the second consecutive weeks, as their miners faced minimal weather-related issues as compared to the first half of the year that hampered outputs.
However, some trade sources cited that the upcoming exports were be affected by market factors such as declining iron ore prices, Chinese port congestion and Beijing’s determination to reduce steel production and emission further by year-end.