Iron ore futures rose higher on better steel prices, despite a choppy session as some market participants doubt whether the rally was sustainable.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange then inched up by 1.48% or RMB 12.50 day-on-day to RMB 858/mt on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange, however, was almost flattish and hiked up slightly by 0.46% or RMB 18 day-on-day to $3,907/mt.
Good steel and iron ore demand to last till year-end
The Chinese rebar prices maintained an upward climb due to catch-up of construction activities ahead of the winter season.
Thus, the country’s HRB400 20mm dia rebar went up further by RMB 16 to RMB 4,124/mt on Nov 17, almost a one-year high, while billet prices were on the rise too, recording RMB 3,600/mt, up RMB 20/mt day-on-day at Nov 18.
Due to the strong steel prices, some trade participants expected strong iron ore demand to last till year-end.
Moreover, the strong steel outlook was further driven up by the recent warm weather and good Chinese economic data of the real estate investment in October.
More iron ore shipments to China
Chinese ports received a total of 25.9 million mt of Australian and Brazilian iron ore for the Nov 9-15 period, up 21% week-on-week, according to Mysteel.
The high weekly shipments rebounded from a slump in previous week, as both countries stepped up their iron ore shipments to China toward year-end, while miners tried to fulfill their annual guidance.
So far, the Brazilian iron ore shipments showed some recovery as its monthly shipment to China slipped by 8.6% on-year to 31.2 million mt in October, due to the wet weather and coronavirus lockdowns that disrupted logistics.