Iron ore futures recovered some loss ground at day trading session, due to a rally at the start of the afternoon session to close higher.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) then rose slightly by 0.14% on-day or RMB 1.50 to RMB 1,049/mt on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange however, went down by 1.75% or RMB 77 day on-day to RMB 4,327/mt.
Rising coronavirus cases concerns and slower restocking activities
Despite the modest gains the paper market, many trade participants were concerned about the rising coronavirus cases in of Hebei, the main steel-making province in China.
Even though, there was no reports on the rising coronavirus cases affecting steel production in the province yet.
There were also no reports over logistics problem in accessing coastal ports in the province for the procurement of raw materials, except that truck drivers must be tested negative for Covid-19 before entering port premises.
Meanwhile, some trade participants were concerned over slower restocking activities, which may imply that the pre-Lunar New year restocking had already peaked.
Lower daily crude steel output from mills’ maintenance period
China’s daily crude steel production dropped by 0.8% to an average of 2.92 million mt per day, over the Jan 1 -10 period.
According to Mysteel, the daily output decline was due to steel mills’ maintenance period across China during early January.
During this period, the iron ore imports from Australia and Brazil also dropped by 19.8% on-week to 22.8 million mt over the Jan 4-10. As some shipments were disrupted by bad weathers off coastal China that caused cargo delays.