Chinese futures retreated slightly today after a recent rally that supported by possible supply concerns in Brazil.
As such, the most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, dropped by 1.03% day-on-day to RMB 769.50 per tonne on Tuesday.
Following the decline, the steel rebar contract on the Shanghai Futures Exchange also fell slightly by 0.25% day-on-day to RMB 3,619 per tonne at the end of the session.
More Australian exports to hit the market
Australian suppliers may be the largest beneficiary from the potential supply outages in Brazil, as major miners increased their exports from Australia.
As such, the four major miners filled vessels up to a record high of 22.59 million deadweight tonnes (dwt) capacity from Pilbara region of Western Australia for the week ended June 6, up 32% week-on-week, according to Argusmedia.
Around 17.66 million dwt or 78% of the shipments were bound for China, up from 13.54 million dwt recorded in previous week.
The record high shipment reflected the market optimism of miners like BHP and FMG which predicted a robust steel demand in June, due to China’s bustling construction activities.
China raises steel imports to meet good domestic demand
China imported 1.28 million mt of finished steel in May, up 27.2% month-on-month, and up 30.3% year-on-year, according to customs data.
On the contrary, the country’s finished steel exports fell by 30.4% month-on-month, and down 23.4% on-year to 4.401 million mt in May.
The high import and low export volumes of finished steel indicated strong domestic steel demand in China. Therefore, the Chinese steel mills are more willing to sell more steel products domestically rather than to the overseas markets.