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Key drivers Some steel mills in Tangshan city, in north China’s steel production hub of Hebei province, were heard to be cutting output amid sustained losses due to a weak spot market.
China’s spot rebar prices fell again today after eastern China steel major Shagang made its fifth consecutive cut to long steel list prices.
Some traders started to reduce offers on weak sales, with many pessimistic in their outlook for the fourth quarter, as iron ore miners continue to ramp up output to hit full-year targets, while demand remains weak.
Mills are more inclined to buy index-linked cargoes as they believe iron ore prices are on another downslope, a Shanghai-based trader said. Quote of the day “Transactions were quite slim today, as Chinese mills are reducing purchases on the seaborne market due to production cutbacks,” a second trader in Shanghai said.
Trades Rio Tinto sold a 170,000-tonne cargo of 61% Fe Pilbara Blend fines with a laycan of October 23-November 1 at $55.89 per tonne cfr China, via tender.
The miner sold a similar cargo at $55.50 per tonne cfr China last Thursday.
BHP Billiton offered a 90,000-tonne cargo of Newman fines with a laycan of October 26-November 4 this morning, but no sale was heard by the time of publishing.
The Shanghai trader is offering November arrival 62% Fe Pilbara Blend fines priced against index, plus a premium of $2-2.50 per tonne cfr China but has received no bids. Port prices Pilbara Blend fines were heard sold at 425 yuan per wet tonne at Shandong ports on Monday, firming from 420-425 yuan per tonne on Friday. The price can be translated to a seaborne market equivalent of about $57.90 per tonne cfr China.
Dalian futures The most-traded January iron ore futures contract on the Dalian Commodity Exchange closed at 380.50 yuan ($60) per tonne on Monday, down 11.50 yuan ($1.80) per tonne from last Friday’s close. Further reading Weak outlook, Shagang cut push China’s rebar prices down