- Iron ore spot prices rose across the board on Wednesday.
- Reports of further production curbs in Tangshan — China’s top steel producing province — helped to support bulk commodity prices despite the threat posed to demand.
- Chinese steel and bulk commodity futures initially surged higher on the news but gave back ground over the latter parts of the session. All major contracts closed at similar levels overnight to those seen on Tuesday evening.
Iron ore prices rebounded on Wednesday, supported by strength in Chinese steel markets.
According to Metal Bulletin, the spot price for benchmark 62% fines bounced 1.2% to $66.73 a tonne, snapping a four-day losing streak in the process.
Modest gains were also seen across lower and higher grades during the session.
65% Brazilian fines added 0.7%, closing at 83.40 a tonne. The price for 58% fines rose by a smaller 0.6%, settling at $42.42 a tonne.
The across-the-board gains coincided with reports that government officials in Tangshan, China’s largest steel making province, had ordered industrial firms, including steel mills, to further curb reduction levels until the end of the year in order to maintain acceptable air quality standards.
According to Reuters, the government ordered industrial plants to reduce output by an average of 40% until December 31.
That may have contributed to an early surge in Chinese steel and bulk commodity futures on Wednesday, the latter coming despite the threat that lower production levels would likely limit demand for raw materials.
Strong gains were seen across all major contracts. However, those gains could not be sustained into the close with most contracts finishing around the same levels as Tuesday’s day session close.
Similar trends were seen in overnight trade on Wednesday with all contracts except for hot-rolled coil and coke futures finishing at similar levels to 24 hours earlier. Modest gains were reported elsewhere.
SHFE Hot Rolled Coil ¥3,693 , 0.85%
SHFE Rebar ¥3,671 , 0.08%
DCE Iron Ore ¥512.00 , 0.59%
DCE Coking Coal ¥1,436.00 , 0.45%
DCE Coke ¥2,391.00 , 1.40%
The mixed performance from futures provides few clues as to how spot markets will fare on Thursday.
Trade in Chinese commodity futures will resume at midday AEDT.
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