DCE hit a roofer today and reached the daily limit at the closing. Throughout the morning session, the DCE climbed to new heights since its opening at RMB 730 a tonne.
Thus, by the opening of the afternoon session, DCE hit RMB 761 a tonne and the stayed there since due to the daily upper trading limit of 6%.
The rebar futures also rallied to RMB 3,833 a tonne, up RMB 130 on-day or 3.51% at afternoon session closing.
Still on the supply woes
Supply of the iron ore remained the main concerns of trade participants on whether the Australian and Brazilian suppliers can keep up with the iron ore shipments after supply disruptions that occurred early in the year.
Meanwhile, the Tangshan steel billet prices increased by RMB 30 to RMB 3,510 a tonne on Tuesday, prompting some strength left in the Chinese steel demand.
Chinese steel mills were estimated to have a steel margin of RMB 200-300 per tonne for rebar products and they are likely to remain in operation as long as there is profitability in steelmaking.
Infrastructure projects heat up in July
On the demand sides, the Chinese steel sector is preparing for the July market on once the sintering curb is being lifted in June 2019.
China’s steelmaking hub of Tangshan had extended its production restriction on heavy industry to end-June 2019. For the steel mills, this meant a 50% cut on the sintering operations.
The month of July was also scheduled for the various infrastructure projects that China had undertaken such as its high-speed rail program that lasted well into the 2025.