Iron ore futures rebounded after a selloff in the morning session, rallying in the afternoon session toward the close.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE), then hiked up by 1.69% day-on-day or up RMB 16.50 to RMB 993.50/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange, however dipped slightly by 0.87% or down RMB 45 day-on-day to RMB 5,127/mt.
Lower inventory to push up rebar prices
The rebar stocks of Chinese commercial warehouses had dropped by 4.8% on-week to 16.3 million mt as of April 1, according to Mysteel’s survey over 132 Chinese cities.
So far, the rebar inventory had declined for the fourth consecutive week and pushed up domestic rebar prices to almost a ten-year high at RMB 5,117/mt as of April 6.
Going forward, the steel consultancy firm expected further price upticks over the April 6-9 period, in view of lower steel inventory in the warehouses.
Declining daily steel production in late-March
China Iron & Steel Association (CISA) recorded lower daily crude steel output among Chinese mills during Mar 21-31 period, due to ongoing stringent environmental production curbs.
Thus, the Chinese mills’ daily steel output reached an average of 2.21 million mt per day, down 3,400 mt per day over the ten-day period, affected by output restriction orders issued to 23 steel mills operating in Tangshan.
The declining daily output rate had supported steel prices to multi-years high in early April, as the Chinese authority expanded steel mills’ inspection checks to other Chinese provinces as well.