Iron ore futures started the week on firmer note, after recovering from last week slump due to steel output restriction.
The futures of Dalian Commodity Exchange (DCE) for September delivery then rose slightly by 0.89% day-on-day or RMB 10 to RMB 1,136.50/mt during the day trading session on Monday.
The rebar futures also went up 0.44% day-on-day or RMB 25 to RMB 5,687/mt, during the day trading session.
More softening of steel prices due to Typhoon In-Fa
Despite the uptick, more market participants expected more output cuts to be imposed on steel mills, as government authority of Shandong had asked steelmakers to trim their production till the end of the year, as of Jul 23.
Due to the output cuts, steel prices like Tangshan billet prices rose higher by RMB 40 day-on-day to RMB 5,240/mt on Monday.
Though, Mysteel expected long steel prices like rebar and wire rod to soften during Jul 26-30 period, due to impact of heavy rains after the Typhoon In-Fa made landfall in central China.
WSA recorded strong steel growth in H1 2021
World Steel Association (WSA) recorded crude steel production at 167.79 million mt in June 2021, up 12% year-on-year, as global economy recovered from the Covid pandemic.
As usual, China was the main contributor for the growth, accounting over half of the market output at 93.9 million mt, up 1.5% year-on-year in June.
However, market participants expected China to lower its crude steel production as the Chinese authority strived not exceed crude steel output level of previous year around 1 billion mt to comply with stricter emission controls.