Iron ore futures inched down at the start of the week, due to bearish market sentiment over slowing demand and new covid variant threats that affected market confidence.
The futures of Dalian Commodity Exchange (DCE) for January delivery then dropped slightly by 0.42% day-on-day or down RMB 2.50 to RMB 591.50/mt, during the day trading session on Monday.
The rebar futures however, hiked up by 0.65% day-on-day or up RMB 28 to RMB 4,359/mt, during the day trading session.
Small purchases to lift market sentiments
Despite the declining iron ore futures, some trade participants expected some rally over long steel product prices like rebar and wire rods over the Dec 6-10 period.
As some Chinese construction firms may accelerate their construction projects to meet deadlines by the end of the year. Thus, Tangshan billet prices increased by RMB 50 to RMB 4,340/mt levels since Friday.
Furthermore, there might be some smaller lots purchases over the week on need basis, as mills increased steel output during the month, after the easing of stringent production restrictions.
Steel production to become greener in latest five-year plan
Chinese steelmaking sector is expected to cut carbon emissions per unit of China’s whole industrial added value by 18% by the end of 2025, according to Ministry of Industry and Information Technology (MIIT).
To achieve the goal, the plan called for an upgrade 530 million mt/year of steelmaking capacity to ultra-low emission standard by 2025, with the long-term target of becoming carbon neutral by 2060.
Moreover, the plan also included to expand the country domestic scrap supply to increase by 320 million mt/year by 2025, as compared to the current 260 million mt/year level recorded in 2020.
So far, major steelmaker, Baowu Group had heeded to the call and scheduled to reduce its carbon emission per metric ton of crude steel by 30% from 2020 to 2035, through working on hydrogen-rich blast furnace technology and increase its scrap consumption to 50% in converters.