Iron ore futures went up higher following a late rally in the afternoon session due to better buying interests.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange rose by 1.40% day-on-day to RMB 797 per mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange also inched up higher by 0.88% day-on-day to RMB 3,650 per mt.
Better buying across iron ore grades
The price uptick traced to end-users’ buying interest from different iron ore grades in preparation for the winter season ahead.
As some steel mills also tried to reduce their production costs by using high-low grade combination for blast furnace mix, such as blending high grade Carajas fines with Indian low-grade fines.
The Yandi fines also generated decent buying interest due to its low alumina content, which was useful to comply with sintering cut as end-users prepared for the upcoming winter season.
Meanwhile, the mid-grade Jimblebar fines were in demand as well due to better qualities and lower impurity levels from the recent cargoes.
Slower rebar production on thin margins
Despite the good buying interests, China’s rebar production went down slightly by 0.3% week-on-week and resulted in a 6.5 month low at 3.6 million mt over the Oct 8-14 period.
The low rebar output was due to thin rebar margins, plus the recent maintenance of blast furnaces and electric arc furnaces also hindered rebar production.
As such, the price of the HRB 400 20mm dia rebar went down slightly by RMB 2 day-on-day to RMB 3,813/mt as of Oct 20 based on Mysteel’s assessment, while Tangshan billet prices inched up slightly by RMB 10 to RMB 3,410/mt on Wednesday.