Iron ore futures saw a selloff at the afternoon session but managed to stabilize at the close to gain some ground.
Thus, the most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange were almost flat with a small rise of 0.18 % or RMB 1.50 day-on-day to RMB 835.50/mt on Thursday.
The steel rebar contract on the Shanghai Futures Exchange followed similar trading pattern as the DCE and went down slightly by 0.23% or RMB 9 day-on-day to RMB 3,832/mt.
Good steel demand to last till end-November
Steel margins remained high with the output cut in Tangshan and the steelmakers’ maintenance period, amid decent downstream steel demand.
However, some trade sources projected the good steel demand to last till end-November, due to the catch up of domestic construction works right before the winter season.
After that, the construction activities were slated to slow down from the cold weather, likewise the steel mills will slow down production as well.
Chinese mills back medium grade ores for cost efficiency
In view of slowing winter demand, some Chinese mills turned to obtain more medium grade fines due to its cost effectiveness as compared to high-low grade fines combination in blast furnace mix.
There was also much availability of the medium grade fines in spot market, due to higher shipments from Port Hedland in October.
According to Pilbara Port Authority, the Australian terminal exported 46.5 million mt of iron ore in October, up 10% year-on-year, and around 86% or 39.7 million mt of iron ore were bound for China, which was an yearly increase at 10.5%.