DCE closed the day at RMB 781.50 a tonne, up RMB 11.50 on-day, thanks to a last 10-minute market short squeeze.
Similar trend occurred in the rebar futures as well, with a late surge as the afternoon session was about to close.
Thus, the rebar future closed at RMB 3,792, down RMB 13 on-day despite the last-ditch spike at the afternoon trading session.
Billet price stops from further decline
The Tangshan billet prices recorded at RMB 3,500 a tonne on Thursday, unchanged at day-on-day basis.
According to trade sources, the Tangshan billet prices are expected to drop today, however as iron ore prices surged, the steel mills decided to set a floor price at RMB 3,500 and prevent for further decline in Tangshan billet prices till tomorrow or Friday morning.
The rationale of the price setting is to maintain steel margins amid higher raw material costs and prompt mills to seek more cost saving measures from iron ore blending in blast furnace.
Vale to restart more mines??
Some trade sources indicated that Brazilian miner, Vale is close to restart its Brucutu mine with capacity of 30 million mt production year.
According to the source, the Brucutu mine has already produced 10 million mt per year through the dry-stacking process that did not use the tailing dam. The remaining 20 million mt is expected to restart over the next few days.
Besides Brucutu mine, Vale is believed to schedule the restart of another 30 million mt production year in the next 6-12 months from other mines like Timbopeba, Vargem Grande, Pico and Alegria mine.
Well, if the ‘rumor mill’ prove to be true, then this should ease the tight supply situation and put downward pressure on iron ore prices.