Chinese futures came slightly flat today after a selloff in the morning session, before recovering loss grounds later at afternoon session.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, edged up slightly by 0.40% day-on-day to RMB 755 per tonne on Wednesday.
Likewise, the steel rebar contract on the Shanghai Futures Exchange also posted slight gain of 0.72% day-on-day to RMB 3,364 per tonne.
No changes to Vale’s output guidance despite rising coronavirus cases
Brazil’s Vale had reaffirmed that its annual guidance for 2020 remained unchanged despite recent coronavirus outbreak in one of its mines.
The Brazilian miners had continued mining operation in the affected Itabira mine, after winning an injunction against court ruling to shut down the mine after 200 workers were tested positive for COVID-19.
Thus, Vale will maintain its annual guidance of 310 million-330 million mt for 2020, after previous revision earlier this year from 340 million-355 million mt due to rainy season.
Australian ores to fill in the potential supply gap
Despite Vale’s reassurance, the market participants did try to diversify their risks in increasing their intakes and usage of Australian fines in their blast furnace.
To them, there was more supply stability among the Australian suppliers and thus some trade participants expect further upside of premiums for Australian medium grade fines.
Thus, Australia’s MAC fines and Roy-hill fines started to gain much popularity among the Chinese traders due to their relatively lower alumina contents among the medium grade ores.