Iron ore futures rebounded over buoyant market outlook, despite DCE’s tightening of trading limits.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) rose slightly by 0.93% or RMB 9.50 to RMB 1,036/mt on Thursday.
The steel rebar contract on the Shanghai Futures Exchange however, dropped by 0.39% or RMB 17 day-on-day to RMB 4,291/mt.
Iron ore prices to slid back to $120/mt
With speculative trading curbed by tougher measures from the DCE, some industry experts expect further correction for iron ore prices.
As such, Shanghai Metal Markets predicted the iron ore rally to end soon and dropped to the $90-$120/mt range, reflecting closer to market fundamentals.
However, other market experts expected only some slight price correction in short term, but highlighted that there might still some room for improvement.
As other major global economic nations may follow China and engaged in various post-Covid infrastructure spendings to kickstart their pandemic-hit economies.
Demand of Chinese manufactured goods on the rise
Chinese production for manufactured goods or white goods continued to rise in November, supported by good demand, according to China’s National Bureau of Statistics (NBS).
For instance, the output of refrigerators rose by 22.5% on-year to 9 million units, due to higher exports demand as global economy recovered gradually from the pandemic.
However, the country’s crude steel output is slated to drop in December, in view of winter season that lowered construction activities.
As China Iron & Steel Association (CISA) recorded daily crude steel output at 2.2 million mt per day during Dec 11-20 period, almost flat or down 0.01% to previous ten-day period.