Iron ore futures entered another correction phrase for the second consecutive days, following a market selloff at the close.
Thus, the most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange plunged by 3.40% day-on-day to RMB 824.50 per tonne, after nosediving from a high opening.
The steel rebar contract on the Shanghai Futures Exchange also faced a market selloff at the closing and went down by 2.22% day-on-day to RMB 3,658 per tonne.
Cautious trading among end-users
The correction again implied market concerns over slowing steel sales despite of the typical peak construction demand season at Sep-Oct period.
In the meantime, there was also strict sintering cut being imposed in steelmaking hub of Tangshan, that boosted higher usage of lump and pellet in blast furnaces.
This led some market participants to expect stricter production control measures being introduced in October before the winter season started.
Meanwhile, some potential buyers find that iron ore prices had risen too high recently, especially for prices of high grade fines and low grade fines, while mid-grade fines prices were largely stable.
Indian fines on the rise from robust Chinese demand
More Chinese buyers were also seeking for Indian fines, due to popularity of blending high grade fines with low grade fines for blast furnace mix.
As other low grade fines such as Super Special Fines (SSF) had rallied to higher prices recently, while Chinese end-users were trying to reduce raw material costs.
However, the price of Indian fines is expected to rise in near term due to slow shipments amid Indian monsoon season which is slated to end by October.
Moreover, the port inventory of Indian fines among Chinese ports were diminishing as well with total tally at 1.4 million mt for this week, down 20% on-week and down 29% on yearly basis, according to Argus media.