Chinese iron ore futures remain unusually quiet, ignoring strength in Chinese steel prices and the release of major Chinese economic data on Tuesday.
According to data from the Dalian Commodities Exchange, the September 2018 iron ore contract finished Tuesday’s day session at 488 yuan, down marginally from Monday’s night session close of 489 yuan.
In July, the contract gained 3.3%.
The modest decline came despite strength in Chinese rebar futures which continued to rally on the back of production curbs, low inventory levels and strong demand.
The October 2018 contract finished trade at 4,171 yuan, having risen to 4,184 yuan earlier in the session, the highest level since February 2013. It closed Monday’s night session at 4,128 yuan.
Over July, it added close to 10%.
According to data released by China’s Iron and Steel Association (CISA), average daily steel output from member steel mills stood at 1.96 million tonnes in the middle of July, down 19,200 tonnes from the first 10 days of the month.
The slowdown in production, partially reflecting temporary curbs introduced on environmental grounds, may explain the divergence seen between iron ore and rebar futures during the session.
Neither iron ore or rebar futures showed any significant reaction to the release of official Chinese PMI data during the session.
And that theme continued in overnight trade, as seen in the scoreboard below.
SHFE Rebar ¥4,191 , 0.84%
DCE Iron Ore ¥486.00 , -0.31%
DCE Coking Coal ¥1,198.00 , -0.70%
DCE Coke ¥2,306.00 , 1.56%
Trade in Chinese commodity futures will resume at 11am AEST, 45 minutes before the release of Chinese manufacturing PMI data for July from IHS Markit.
Spot iron ore prices were not released or updated from Metal Bulletin on Tuesday.