Iron ore futures rebounded from previous trading day losses, amid slowdown in steel demand and weak market outlook for the new year.
The futures of Dalian Commodity Exchange (DCE) for January delivery then inched up by 0.98% day-on-day or up RMB 6.50 to RMB 669.50/mt, during the day trading session on Thursday.
The rebar futures, however, went down slightly by 0.58% day-on-day or down RMB 25 to RMB 4,282/mt, during the day trading session.
Not-so-strict output restriction for major mills
Some trade participants expected restocking activities to pick up, despite the poor steel demand outlook for the new year.
Furthermore, some market participants felt that output restriction was not enforced strictly as before, as some major mills were still allowed to ramp up production, after they had fulfilled their quota for the year after complying with the environmental regulations.
There was also no official confirmation on massive shutdown of industrial firms in northern China as anticipated by market during the Winter Olympics.
Daily steel output drops to record low in December
China’s daily crude steel production extended its downward spiral as output rates reached a new low, according to Mysteel.
The steel consultancy firm recorded the daily average crude steel output at 2.36 million mt per day during the Dec 11-20 period, down 0.3% from previous ten-day period.
The lower production was not only recorded in December, but rather for almost the whole of H2 2021, as Beijing policymakers pushed for output restriction to curb emissions and enforced power rationing from industries to conserve electricity.