Chinese futures continued to trade lower on Thursday, due to muted market activity.
The most active iron ore contract for May 2020 delivery in Dalian Commodity Exchange (DCE) dropped 1.20% on-day to RMB 658.50 per tonne.
The steel rebar contract for May 2020 delivery on the Shanghai Futures Exchange, also increased by 0.25% day-on-day to RMB 3,565 per tonne by the end of afternoon session.
Chinese restocking over?
Most of the Chinese steelmakers were heard to finish restocking for February loading cargoes for production needs.
Thus, some buyers are also seeking for March loading cargoes as they expected that iron ore demand to improve in forward months.
In the meantime, some of the iron ore buyers were seeking for Yandi fines, which were seen as alternative for Brazilian fines with low alumina fines. Recently, Brazilian fines prices had increased due to tight supply from seasonal rains in Brazil.
Steel consumption to slow in 2020
China’s domestic steel consumption is expected to slow by 2% to 890 million tonnes in 2020, as compared to the annual growth of 6% recorded in 2019.
The forecast was done by China’s Iron & Steel Association (CISA) as the association expects key steel consuming sectors to see slow and modest growth for 2020.
However, there might be some spillover effect from the steady infrastructure investment last year, as the property market achieved better than expected results in 2019.