Dalian Commodities Exchange (DCE) rose steadily on Tuesday, supported by restocking demand from end-users.
The most-traded January 2020 iron ore contract on DCE closed at RMB 655.50 a tonne at the end of afternoon trading session, up 3.31% from previous night session, while at similar level as yesterday afternoon session.
Meanwhile, the rebar contracts ended the afternoon session on slight gain of 0.95% to RMB 3,809 a tonne.
Larger mills turn to seaborne PBF cargoes
The physical demand for seaborne Australian medium grade fines remained strong due to tighter supply among the Chinese ports.
According to Mysteel, China’s 26 ports received around 17.76 million tonnes by the end of last week, down 3.18 million tonnes week-on-week.
It was heard that mills with large blast furnaces still prefer Australian medium grade fines instead of the cost-efficient Brazilian blend fines as they cannot switch their feedstocks in short notice unlike smaller mills with flexible blast furnace mix.
Thus, the larger Chinese mills might seek for more seaborne Australian medium grade fines to cover their blast furnace needs over near term.
More Brazilian exports in September
Brazil has accelerated its iron ore exports in September, with a daily average exports of iron ore at 1.56 million tonnes for the first five business days of September.
According to Brazil’s Ministry of Trade and Commerce, the September average was much higher than the daily average of 1.37 million tons recorded for the month of August 2019.
The higher export volume may lower the Brazilian iron ore prices, making them more competitive to other brands of iron ore in the spot market.