Chinese futures slid for the second consecutive day due to supply easing as Vale reopened its Itabira complex.
As such, the most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, dropped by 1.03% day-on-day to RMB 765 per tonne on Thursday.
However, the steel rebar contract on the Shanghai Futures Exchange, went up slightly by 0.58% day-on-day to RMB 3,618 per tonne.
No supply shortfall from Vale
Brazil’s Vale was allowed by court ruling to reopen mining operations at its coronavirus-hit Itabira complex.
According to a company statement dated on Wednesday, the state authority found Vale’s mitigation measures were adequate to restart work at Itabira complex.
Thus, Vale will maintain its annual guidance unchanged at 310-330 million mt, and the Itabira complex is expected to contribute production at around 36 million tonne of iron ore per year.
More Chinese stimulus to boost economy
China’s monetary policy should be more flexible, and it should strengthen counter-cyclical adjustments in economic management, according to the country’s vice Premier Liu He’s speech on Thursday.
His speech has led to market expectation for further stimulus measures to boost the country’s coronavirus-hit economy through financing for projects like infrastructure.
Thus, Chinese mills were encouraged to ramp up output to keep steel supplies running for the second half of the year to meet infrastructure demand