After a solid run over the past few sessions, it looks like the rally in Chinese steel and iron ore futures is over for the moment.
Here’s the scoreboard at the mid-session break in China on Tuesday:
SHFE Rebar ¥3,853 , -1.38%
DCE Iron Ore ¥548.00 , -2.75%
DCE Coking Coal ¥1,282.50 , 1.70%
DCE Coke ¥2,069.50 , 1.17%
Having started the session higher, both rebar and iron ore futures have slipped into the red, falling back from highs of 3,996 yuan and 574 yuan respectively hit earlier in the session.
Over the past 10 sessions both contracts had rallied by more than 22%, hinting that some of the weakness today may be due to profit-taking.
Soft Chinese trade data released earlier in the session also coincided with the decline, including the news that Chinese steel exports fell by 28.7% year-on-year in July to 47.95 million tonnes.
Chinese iron ore imports also softened from a month earlier, falling to 85.74 million tonnes from 94.7 million tonnes in June.
According to data from Shanghai Steelhome, Chinese iron ore port inventories stood at 139.15 million tonnes last week, remaining near the record high level of 141.45 million tonnes hit in late June.
Inventories have increased by 25% so far this year despite a re-acceleration in Chinese steel production.
In June alone China produced 73.2 million tonnes of crude steel, according to data from worldsteel, the largest monthly total on record. That was up 5.7% on the levels produced one year earlier.
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