Iron ore futures posted slight gain on Monday, despite the cooldown of restocking activities ahead of the Golden week holidays.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange then rose slightly by 0.92% day-on-day to RMB 770 per tonne on Monday.
The steel rebar contract on the Shanghai Futures Exchange also posted slight gain of 0.08% day-on-day to RMB 3,540 per tonne.
Cooling period for seaborne iron ore market in end-2020
The seaborne iron ore market might see a cooling off toward the end of 2020, according to Australia’s Department of Industry, Science, Energy & Resources.
This was due to the possibility of the second coronavirus outbreak in China or the Chinese government stimulus plans fell short of market expectation and affected steel consumptions.
Due to these risks, the department expects China’s steel production to drop slightly by 987 million mt for 2020, before rising to output of 1 billion mt in 2021.
So far, the department’s view was contrary to those held by investment banks, such as Citigroup which expect iron ore prices to range between $100-$120/mt for the rest of the year on strong Chinese steel demand.
Stable steels prices for the week
China’s steel prices are expected to stay rangebound over Sep 27-30 period, ahead of the National Day holidays in early October, according to Mysteel.
However, the steel consultancy noted that there might be some small pocket of demand in the last few days of September to support steel prices.
Nevertheless, the rebar prices had been continuing its downward trend as Mysteel assessed the HRB400 20mm dia rebar price to dip for the tenth consecutive day to RMB 3,754/mt as of Sep 27, down RMB 4 on daily basis.