Steel, iron ore fluctuate on import adjustments

Chinese steel futures and seaborne iron ore prices were fluctuating on Wednesday amid some uncertainty. Iron ore was adjusting to longer processing times for imports from Australia, Kallanish notes.

On the Shanghai Futures Exchange the October rebar contract closed CNY 10/tonne higher than Tuesday at CNY 3,805/t ($547/t), while the same contract for hot rolled coil closed CNY 28/t higher at CNY 3,900/t. In Tangshan, billet prices slipped CNY 20/t to CNY 3,420/t.

The Kallanish KORE 62% Fe index gained $0.38/t to $121.32/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index increased $0.06/t to $128.97/dmt cfr, but the KORE 58% Fe index slipped $0.61/t to $106.39/dmt cfr.

On the Dalian Commodity Exchange, January 2021 iron ore settled down CNY 20.5/t at CNY 819.5/t, while on the Singapore Exchange September 62% Fe futures settled up $1.11/t at $116.32/t. The same contract for 65% Fe and 58% Fe futures settled up $0.99/t at $125.72/t, and up $0.44/t at $105.27/t respectively.

Markets were volatile on Wednesday even though prices did not move far from their starting points. One trigger for uncertainty was the increase in time it takes to acquire permits for commodities imported from Australia. Effective from 11 August, imports from Australia will take 11 days to receive import permits. Cargos were reportedly being affected on Wednesday.

The impact on prices is uncertain, but in the short term it is likely that a slowdown in deliveries of cargos into port stocks will support prices.