Arrivals of the steelmaking raw material in China totalled 24.1 million tonnes in the week of Sept.9-15, up by 6.3 million tonnes from a week earlier, data compiled by Mysteel consultancy showed. Shipments from Australia and Brazil last week rose by 890,000 tonnes to 21.9 million tonnes. Futures contract of the most-active construction steel rebar on the Shanghai Futures Exchange, for January delivery, fell 1.3% to 3,493 yuan a tonne, declining for a second session.
"Market will further evaluate the impact on steel products' consumption and output from the coming National Day holiday," Huatai Futures wrote in a note, adding that the underperformance of the newly launched iron ore futures contract based on new delivery rules also affected sentiment. Earlier this week, China's Dalian Commodity Exchange introduced a brand-based system for iron ore futures, with the first contract slated for delivery in September 2020 trading 3% lower in morning trade.
"Market will reevaluate the raw materials' impacts on final products." Huatai Futures said. Benchmark 62% iron ore for delivery to China, as assessed by SteelHome consultancy, edged lower to $97 a tonne on Tuesday. Futures for hot-rolled coil steel, used in cars and home appliances, for January delivery on the Shanghai Futures Exchange, dropped 0.9% to 3,510 yuan a tonne.
Other steelmaking ingredients sagged, with Dalian coking coal down 1.2% at 1,334 yuan a tonne, while coke futures dipped 0.1% to 1,979 yuan. China's state planner approved nine fixed-asset investment projects worth a total of 68.9 billion yuan in August. The impact of increased infrastructure spending will be limited for commodities in general. But a small pick-up in infrastructure spending should offer the iron ore and steel markets some solace and help keep prices relatively well supported in coming months, ANZ Research said in a note.