Iron ore futures ended the week on positive gains, albeit the previous selloff sessions occurred during the start of the week, due to bearish sentiment on stricter output cuts.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE), then rose for the fourth consecutive trading day by 2.01% day-on-day or up RMB 21.50 to RMB 1,088.50/mt on Friday.
The steel rebar contract on the Shanghai Futures Exchange, also surged up by 2.75% or up RMB 132 day-on-day to RMB 4,934/mt.
Lower steel stocks amid better consumptions
Chinese steel stocks continued to decline for the fifth consecutive week, amid output curb and higher consumption, according to Mysteel.
The total mills’ inventory reached 8.9 million mt during Mar 18-24, down 3.3% on-week, after tallying steel products like rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate.
Chinese retail’s steel stocks also declined for the third consecutive week by 4.7% to 31.3 million mt for the week ended on Mar 25.
However, the iron ore port inventory showed a surplus at 130.66 million mt among 45 major Chinese ports, up 450,000 mt week-on-week.
Suez Canal blockage affects European steel industry and Brazilian iron ore shipments
The Suez Canal blockage might affect the European steel sector with slower deliveries and resulted in steel prices upticks, especially for steel products like hot rolled coil.
Although, some trade sources believed that the impact to be kept at minimum, but any prolonged blockage might cause more upheaval in the already tight supplied European steel market.
Moreover, some high-grade iron ore cargoes bound for China were heard to be caught in the bottleneck as well, which might translate to price uptick for high grade fines in near term.