Iron ore prices were pushed northward due to the hike in steel prices on Monday.
Fearing short supply of steel in near future owing to the production restrictions in the parts of the country, Chinese market rebounded with moderate price hikes in the beginning of the week.
The price recovery was in response to the government’s declaration of production cap on steel, iron ore and coking coal to control the air pollution. Nevertheless, some buyers responded otherwise citing the large inventory sizes.
On the other hand supply limits by millers were reported from various corners along with the increased prices. However the positive reflections were posted on account of the stocks that are much higher than the month earlier at 5.53 MnT according to sources denying the possibility of a low supply even after regulated production.
The beginning of the week saw a rise in futures, with the most active DCE iron ore contract rising 3.18% while SHFE leapt 4.73%.
Spot billet prices in Tangshan rose RMB 10/t and rebar prices in northern China surged RMB 160/t. The rally lifted trading prices for spot iron ore. In China, port stock prices went up around RMB 10/wmt.
Dalian Commodity Exchange
The most-traded May iron ore futures contract closed at 714 Yuan (USD 103.90/MT) on Monday, up 15.50 Yuan (USD 2.25/MT) from last weekend’s price.
Billet
Billet was traded at 3,310 Yuan (USD 482/MT) including VAT in Tangshan, up 30 Yuan (USD 4.40/MT) from last weekend.
Shanghai Futures Exchange
The most-traded May rebar futures contract closed at 3,612 Yuan (USD 526/MT) on Monday, up 114 Yuan (USD 16.60/MT) from last weekend’s price.
Rebar
A sprint in futures in China affected a significant increase in spot rebar prices. The spot rebar prices rose significantly trailing the remarkable rise in the futures market. As billet prices soared rebar prices too gained the momentum reporting the hike.
East China, domestic, grade III 16-25 mm rebar, traded at 3,670-3,700 Yuan (USD 534-538/MT) including VAT.
North China, domestic, grade III 16-25 mm rebar, traded at 3,700-3,730 Yuan (USD 538-543/MT) including VAT.
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