Chinese futures stayed virtually flat with gains at the morning session being offset by selloff in the afternoon session.
Thus, the most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, was flat at RMB 762.50 per tonne on Monday.
The steel rebar contract on the Shanghai Futures Exchange, followed the same movement with high opening only to drop at afternoon close of RMB 3,572 per tonne, down 0.70% on daily basis.
Lower steel demand in June
The lower closing at the DCE reflected trade participants’ concern over China’s steel demand in summer season as construction activities slowed down.
In northern China, the scorching heat might slow down construction activities due to high temperatures around 39 degree celsius recorded in the provinces of Hebei, Shandong, Jilin, Liaoning and in Beijing municipality recently.
Meanwhile, the heavy rainfalls in southern China affected millions across 11 provincial-level regions, which destroyed over 1,300 houses and brought direct economic losses of over RMB 4 billion or $564 million, according to the country’s ministry of Emergency Management.
Record-high iron ore shipments from Australia and Brazil
According to Singapore-based OCBC, Australian suppliers might export a record volume of iron ore in June, based on some initial data.
On the other hand, Brazilian iron ore shipment seemed to be returning to normal despite market concerns over rising COVID-19 cases that affected supply.
The high shipping volume are meant to meet China’s iron ore demand, which dropped to a four-year low at its recent port inventory at 107.75 million tonnes last week, according to SteelHome consultancy data.