Iron ore futures rose for the second consecutive trading day, following the upticks in steel prices and lower iron ore shipments.
The futures of Dalian Commodity Exchange (DCE) for September delivery then rose by 2.84% day-on-day or up RMB 34 to RMB 1,231/mt at the close of day trading session on Tuesday.
The rebar futures also rallied up by 2.93% on-day or up RMB 151 to RMB 5,304/mt, during the day trading session.
Higher steel prices despite relaxed output restriction in Tangshan
Tangshan billet prices jumped up by RMB 20 to RMB 4,910/mt during Tuesday afternoon, amid easing of output restriction in early July.
Thus, market participants expected some rally in raw materials prices following the short-term ramp up in production, which is likely to face more output cuts later to comply with stricter emission regulations.
Meanwhile, China’s daily trading volume of construction steel including rebar, wire rod and bar-in-coil went to six weeks high at 262,055 mt per day on Jul 5, as Chinese traders returned from the recent political celebration, according to Mysteel.
Lower iron ore shipment arrivals during early July
Mysteel’s survey indicated lower iron ore shipments from Australian and Brazilian suppliers, which further worsen the supply tightness situation.
According to Mysteel, the total iron ore shipments from Australia and Brazil reached 24.9 million mt during Jun 28- Jul 4, down 10.2% week-on-week.
The shipment volumes were gathered from 19 ports and 16 mining firms located in Australia and Brazil, surveyed by Mysteel.