Iron ore futures dipped slightly after a volatile trading session, amid softening steel prices and narrowing margins.
The futures of Dalian Commodity Exchange (DCE) for September delivery then inched down slightly by 0.73% on-day or down RMB 8.50 to RMB 1,149/mt on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange also dropped by 1.75% or down RMB 89 day-on-day to RMB 5,004/mt.
Further corrections of steel prices
Due to bearish market sentiment on declining steel demand in June, the Tangshan billet prices had stayed under the RMB 5,000/mt level since Monday to record at RMB 4,940/mt.
Similarly, the domestic rebar prices went down by RMB 48/mt on-day to RMB 5,200/mt on Monday, according to Mysteel’s assessment.
Going forward, Mysteel expected further rebar price correction, in view of low margins and typical lull period during summer season.
Growing interests in lower grade fines
There were more market enquiries on low grade fines, as mills shifted their focus away from production efficiency and more on cost savings.
According to trade sources, low grade fines like Yandi fines were sought by mills in the low steel margins environment for reselling purposes in ports.
However, some trade participants were in no hurry to procure seaborne iron ore cargoes, as they expected further price corrections in the rainy season ahead.