Chinese steel and iron ore futures, which have been dropping for the last ten working days, have shown some recovery. SHFE rebar futures’ October contract closed at RMB 4,817/t ($755/t) on 27 May’21, witnessing a rise of RMB 150/t ($24/t). The sudden jump brings some hope to the market as participants.
Indian markets also corrected yesterday with SteelMint billet index hitting a 45 days low to INR 40,200/t ($553) exw Raipur on subdued demand in finished steel. With major consuming markets still under lockdown and upcoming monsoon season the demand in June is likely to remain dented as well.
In another concern, Iron ore supplies continue to be disrupted due to heavy rainfalls in Odisha. It is expected that movement will remain affected in the coming few days.
Image Source: WhatsApp
In a recent auction by SAIL (Bolani mines, Odisha), 72,000t high grade fines was sold at INR 7,200/t (FoR, Incld Royalty, DMF, NMET & additional premium as per MMDR Amendment Act)
It may be too early to say if Chinese futures would continue to show positive trend, but what is certain is that the prices have over corrected and downside could be limited in near term.
Leave a Reply