Chinese futures struggled to stay on positive after a selloff near closing that threatened to give up all the gains made in the morning session.
Thus, the most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, went up slightly by 0.07% day-on-day to RMB 757 per tonne on Tuesday.
Similar movement was seen in the rebar futures with a selloff near closing hours as the steel rebar contract on the Shanghai Futures Exchange posted slight gain of 1.51% day-on-day to RMB 3,634 per tonne.
New round of output curb in Tangshan
Steel prices are expected to get a boost from new round of anti-pollution curb in steelmaking hub of Tangshan in June.
Some trade sources think that the output curbs will not affect the demand of raw materials much, given the current robust iron ore demand.
Besides, many trade participants have already factored that into their procurement strategy, in viewing the output curb in June just as a continuation from previous months.
However, they warned that the bullish iron ore demand may turn bearish if the Chinese authority imposed wider stringent production cuts across regions to improve air quality.
Buyers seek low alumina alternatives over supply tightness
Chinese buyers were seeking for iron ore alternatives with low alumina levels due to potential supply tightness of Brazilian cargoes from rising coronavirus cases in the country.
For instance, around 200 iron ore miners were tested positive for the coronavirus in Vale’s Itabira mine last week. Later, the Brazilian court ordered the closure of the mine but only to overturn the decision after Vale won an injunction against the case.
Nevertheless, some end-users were heard to increase the usage of domestic concentrates with low alumina levels to reduce dependency on imports, which was especially popular among the northern China-based mills.