Chinese futures fell for the second consecutive day due to market concerns over lower steel demand the rainy season.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, went down slightly by RMB 3.50 or 0.47% day-on-day at RMB 744.50 per tonne on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange also slipped slightly down by RMB 4 or 0.11% at RMB 3,565 per tonne.
Slow construction activities during summer
Market participants were concerned over typical slow construction activities during summer season.
During this season, the construction activities were normally hindered by hot weather in northern China, while the rainy season in southern China also affected steel demand.
Furthermore, stricter production controls are expected to extend into July for mills based in Tangshan, reducing in the demand for steel-making materials.
More Brazilian shipments and less Australian cargoes in July
Despite market concern over slowing steel demand, there might be some supply tightness from Australian suppliers in July to support prices.
According to Huatai Futures, Australian iron ore shipment to China may drop in July due to typical maintenance checks for miners during the period.
However, the Brazilian shipments may increase as miner try to catch up for the low shipments early in the year due to heavy rains.
Apparently, there had already been some slowdown in shipments from both Brazilian and Australian suppliers.
As Refinitiv, a vessel-tracking firm recorded a total of 83.24 million tonnes of steel-making materials being shipped to China in June, down 10.6% month-on-month from previous month volume of 93.15 million mt.