Iron ore futures closed higher on Monday, rebounding from last week losses due to better market outlook.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange rose by 2.41% day-on-day to RMB 848.50 per tonne at start of the week.
The steel rebar contract on the Shanghai Futures Exchange then bounced up slightly by 0.47% to RMB 3,664 per tonne.
Higher iron ore imports in September
Some market participants expect higher Chinese imports for iron ore during September in view of the peak construction season and build-up from previous high import volumes.
For Jan-Aug period, China had imported 760 million mt of iron ores over the eight-month period, up 11% year-on-year, signifying a sharp economic recovery from the coronavirus pandemic.
Therefore, Australian bank, Westpac estimated the country’s iron ore import to reach 92 million mt in September or even hit 97 million mt due to high steel demand in China.
Lower rebar and wire rod prices for the week
Despite the market optimism on raw materials imports, the prices of rebar and wire rod prices are expected to move downtrend for the week of Sep 14-18.
According to Mysteel, this was due to bearish market sentiment on lower-than expected steel demand, as some trade sources deemed the market as overheated.
However, China’s steel demand is expected to pick up toward end-September or right before the week-long National Day holidays during the Oct 1-8 period.
As steel mills ramped up production, while some of the mills are expected to resume operations after their scheduled maintenance in mid-September.