Iron ore futures traded flat on the choppy trading session with bullish opening momentum, but only to ease toward afternoon closing session.
Thus, the most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange were flat day-on-day to RMB 876/mt on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange then went down slightly by 0.89% or RMB 35 day-on-day to $3,910/mt.
Slower daily iron ore output
The static move in the paper movement may be foreshadowing a slower steel demand market ahead due to the upcoming winter season.
As typically of winter season, the construction activities dropped as colder weather made building project works harder to execute, and in turn reduced steel demand and production.
As such, China’s daily crude steel output dipped slightly by 0.4% to 2.94 million mt per day over the Nov 11-20 period, according to Mysteel.
The survey was done across 318 Chinese mills by Mysteel and the slowdown was due to the onset of winter season that caused mills especially in Northern China to lower production.
Pause in restocking activities
Some of the end-users were also more cautious in seaborne iron ores procurement in waiting for clearer market directions.
However, some trade participants expected restocking activities to pick up after the lifting of Tangshan output curb.
Some trade sources even speculated that the restocking activities will continue till next year January, if the downstream steel demand remained robust in China over the winter period.