Iron ore futures dipped lower at the day-close despite a late rally during the afternoon session.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange fell slightly by 0.20% day-on-day to RMB 764.50 per tonne on Friday.
Similarly, the steel rebar contract on the Shanghai Futures Exchange posted slight drop of 0.70% day-on-day to RMB 3,522 per tonne.
Restocking is over for most Chinese mills
The lesser buying interests may be due to most mills having completed their restocking ahead of the National Day holidays, according to Mysteel.
As of Sep 23, it was estimated around 90% of the steelmakers based in Tangshan and Wu’an had finished their replenishment of iron ores ahead of the Golden week.
Due to restocking, the imported iron ore sintering fines of 64 Chinese steel mills reached an eight-month high of 18.5 million mt over the biweekly period of Sep 10-23, up 1.94 million mt fortnightly, based on Mysteel’s data.
Th rush for completion of restocking were due to Chinese mills wanting to avoid possible environmental restriction on ports like Jingtang and Caofeidian in limiting trucks transportation.
Lower Chinese steel exports due to decent domestic market
Despite the slow restocking activities, there were signs that steel demand remained decent in the Chinese domestic market.
For instance, the country’s General Administration of Statistics (GACC) recorded flat steel exports at 22.2 million mt over Jan-Aug period, down 16.4% year-on-year.
The lower steel volumes reflected higher steel consumption rate at the domestic market especially from the automobile and white good sectors, while the global steel market was still on track for recovery.
Moreover, the steel inventory of finished products had also declined for the fourth consecutive week in Sep 17-23, totaling at 6.63 million mt, down 0.5% on weekly basis, based on Mysteel’s data.