Chinese futures suffered a drop by the end of week, due to market uncertainty that prompted a selloff by the end of trading session.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for May 2020 delivery dropped by 2.18% day-on-day to RMB 650 per tonne on Friday.
The steel rebar contract for May 2020 delivery on the Shanghai Futures Exchange also went down by 0.98% day-on-day to RMB 3,441 per tonne.
Iron ore prices to reach pre-Lunar New year level
The supply tightness from Australian and Brazilian suppliers had supported iron ore prices and pushed them toward pre-Lunar New Year levels.
Mainstream Australian fines remained its popularity among iron ore speculators as they offered an ease for resale as compared to other iron ore products.
Meanwhile, demand for Brazilian iron ore products were restricted due to the high premiums whereas mills were trying to reduce costs.
Higher production in March
China is slated to lose 3 million mt of pig iron production in March, as compared to 4.5 million mt loss of pig iron in February, due to coronavirus outbreak.
This was due to restart of more mills as most had finished their maintenance work on blast furnaces by the end of Feb and early Mar due to gradual return of workers and better logistics.
End-users demand was also heard to be recovering but at a slower pace which prompt trade participants to expect higher steel output in March, down yearly but certainly higher monthly from February.