Seaborne iron ore prices rebounded on Monday as blast furnaces have been resuming production following recent restrictions. Scrap prices, however, were weaker as mills are under less pressure to maximise output amid weak demand.
The Kallanish KORE 62% Fe index gained $2.65/t to $217.52/dry metric tonne cfr Qingdao, the highest level since 15 June. The Kallanish KORE 65% Fe index increased $2.96/t to $249.73/dmt cfr, and the KORE 58% Fe index inched $0.54/t higher to $184.10/dmt cfr.
On the Dalian Commodity Exchange September iron ore settled up CNY 36/t at CNY 1,197/t ($185.22/t), while on the Singapore Exchange August 62% Fe futures settled up $5.02/t at $208.73/t. The same contract for 65% Fe and 58% Fe futures settled up $5.53/t at $240.64/t, and up $0.94/t at $174.03/t respectively.
Scrap prices however have not been supported by the upturn. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta slipped CNY 5/t over the weekend to CNY 3,728/t. In Tangshan, billet prices increase CNY 20/t on Monday to CNY 4,890/t.
Blast furnaces which had been banked for the 100th anniversary of the Communist Party of China have begun to resume production. The end of restrictions on movement in and out of port stocks also prompted restocking on portside markets.
Weak summer steel demand however means that mills are not aiming to maximise crude steel output with additional scrap purchases. As hot metal output is less constricted, there is less need to top up volumes with higher scrap use.