Posted on 17 Mar 2023
China's futures prices of major ferrous commodities including steel, iron ore, coke and coking coal all trended downward on March 16. Market sources chiefly cited the recent overseas macro pressure, together with the retreating confidence in the domestic steel market amid a slow recovery in China's real estate sector.
On Thursday, the most-traded contracts of steelmaking materials including iron ore, coke and coking coal on the Dalian Commodity Exchange (DCE) – all for May delivery – tumbled when the daytime trading session ended, the exchange data showed.
Significantly, the DCE's coking coal May contract lost a hefty Yuan 88/tonne ($12.8/t) or 4.5% to close the daytime trading session at Yuan 1,853.5/t on March 16. Meanwhile, the exchange's iron ore and coke May contracts deceased by 2.8% and 3% to close at Yuan 902/dmt and Yuan 2,756.5/t respectively.
Also, the most-traded rebar and hot-rolled coil contracts on the Shanghai Futures Exchange (SHFE) both for May delivery dropped by 3.53% and 3.51% respectively to close at Yuan 4,205/t and 4,310/t on March 16.
"Recently, the banking problems in the U.S. and Europe are not only intensifying fears about a global banking crisis, but are also impacting China's commodity market," a Shanghai-based market watcher commented.
Apart from the nervousness in global markets, the slower recovery in China's steel demand against the increasing steel output also triggered concerns in the domestic steel market, according to her.
"The market hasn't seen a very strong actual demand for steel so far in March – a traditional robust season for steel consumption, as the recovery in the domestic property market has been slower than expected," she explained.
Nevertheless, China's steelmakers have maintained high-level production over the past few weeks. This resulted in a negative mood in the steel market and weighed on steel and raw materials prices accordingly, Mysteel Global noted.
For the first two months of 2023, China's daily crude steel output averaged 2.86 million tonnes/day, jumping by 13.8% from the that for last December, Mysteel Global calculated based on the data from the country's National Bureau of Statistics.
Source:Mysteel Global
