Iron ore futures ended the week on high note after recovering from the slump earlier on the week.
The futures of Dalian Commodity Exchange (DCE) for September delivery then rose by 4.11% on-day or up RMB 42 to RMB 1,063/mt on Friday.
The steel rebar contract on the Shanghai Futures Exchange also went up by 4.07% or up RMB 193 day-on-day to RMB 4,933/mt.
High steel output despite prices curb measures
Steel prices had been gaining gradually after recent slump as the Tangshan billet prices rose by RMB 50 on-day to RMB 4,780/mt during Friday afternoon.
Moreover, the daily crude steel production also reached record high at 3.03 million mt per day during May 1-10 period, according to Mysteel’s survey over 318 Chinese steel mills.
However, the price control over commodity has led to more cautiousness in trading, while trade participants expected steel demand to soften due to upcoming rainy season in southern China.
Balance demand and supply in June
According to Mysteel, the Chinese steel market may experience balanced demand and supply in June, amid stricter price controls on commodities and unfavorable weather season.
However, the steel consultancy firm expected marginal increase in steel output from the relative better steel margins despite a series of price corrections in steel prices.
Meanwhile, the country’s steel production is expected to be disrupted by seasonal weather patterns with rainy season predicted in southern and eastern regions of China.