Iron ore futures had a choppy session and managed to book a gain at the close, despite market concerns over high port inventory.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange rose by 0.84% or RMB 6.50 day-on-day to RMB 789.50/mt on Friday.
The steel rebar contract on the Shanghai Futures Exchange then went up 0.75% or RMB 28 day-on-day to RMB 3,782/mt.
Higher rebar prices from better domestic demand
China’s rebar price rose further for the seventh consecutive trading day, due to better domestic demand.
The national price of the HRB 400 20mm dia rebar went up by RMB 19/mt day-on-day to RMB 3,935/mt as of Nov 5, based on Mysteel’s price assessment.
The price uptick was also supported by the declining steel finished products among mills, as the steel’s stocks totaled at 5.7 million for the week ended on Nov 4, down 5.8% week-on-week.
According to Mysteel, the mills’ steel stocks consisted of finished products like rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate.
Despite the drawdown of steel stocks, market participants were concerned over the high iron ore port inventory, which recorded at 128.12 million mt for the week ended Nov 6, up 482,500 mt week-on-week.
RBA expects more iron ore exports
Reserve Bank of Australia (RBA) expects Australian iron ore exports to remain strong over the next 12 months, due to robust steel demand in China.
The Chinese high steel demand was fueled by stimulus packages aimed at infrastructure and real estate construction to kickstart the coronavirus-hit economy.
However, the bank held bearish view on coking coal exports due to the Chinese informal ban on Australian coal imports.