Chinese futures slipped downward despite the return of Chinese participants after a long holiday.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, went down by RMB 29 or 3.79% day-on-day at RMB 736 per tonne on Monday.
The steel rebar contract on the Shanghai Futures Exchange followed suite and went down by RMB 63 or 1.74% at RMB 3,552 per tonne.
Easing of supply tightness
It was reportedly that there were around 10-20 shipments of iron ore waiting for offload in Chinese ports by Jun 26.
With these shipments, some trade sources expect Chinese port inventory to rise onwards instead of declining since mid-April.
In the meantime, the demand for construction steel products were stalled in southern China due to torrential rains, which reduced the demand for construction materials and resulted in high rebar stockpiles.
Low iron ore imports in May
Some trade participants also believed the high steel demand had cooled down as China’s iron ore imports fell by 9% month-on-month to 87.03 million mt in May.
According to the General Administration of Customs, the country’s imports had fell among its Australian and Brazilian suppliers by 6% and 25% on monthly basis during the month of May.
However, the custom noted an increase of iron ore imports from India at 4.03 million mt, up 29.09% month-on-month in May.
Many of the Indian imported products belong to low grade products and iron ore pellets which the latter was redirected to China after the cancellation of contracts by European end-users.