Chinese futures ended the afternoon session in slight gain, as trade participants waited for further market directions.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE) closed positively at RMB 638 per tonne, up 0.95% day-on-day at Tuesday, after a sell down in the morning session.
The steel rebar contract on the Shanghai Futures Exchange was mostly flat throughout the session before spotting a slight gain of 0.35% to end at RMB 3,464 per tonne.
Expected steel supply glut in June
Platts predicted a steel oversupply in June, as China’s construction activities slowed down during the month due to rainy season in southern China.
Besides, the high steel productions of Chinese-based mills after the coronavirus lockdown may also prompt oversupply in June, when steel demand took a downturn.
According to Platts, most of the Chinese mills had ramped up production after the lockdown and estimated to enjoy stable rebar margins of $60-$70/mt by early May.
In the meantime, many construction firms were rushing their construction projects to make up for loss time in the month of February and March and this catch-up is expected to be done by June, which then may tilt the market to oversupply of steel products.
BHP makes first yuan-denominated sale to Baosteel
Mining major, BHP had become the latest “Big Four” to complete a yuan-denominated sale of iron ore to China Baoshan for the first time on Tuesday and suggested that it may explore using blockchain for future transaction.
The sale was reportedly worth around RMB 100 million and this was after Vale’s sale of iron ore in yuan to China Baowu earlier this year in January.
Another mining major, FMG had also made a yuan-denominated sale of iron ore much earlier in April 2019, while Rio Tinto had concluded its first iron ore sale supported by blockchain technology to Baowu on Tuesday.
According to Baowu, the usage of the yuan in iron ore sales was not only out of operational needs but also promote the currency toward internationalization in the future. BaoshanBaowuBHPDCEFMGRio TintoVale