The ferrous market traded strong at this morning’s open, with iron ore leading the increase, followed by HRC. Rebar caught up later on, but with less momentum.
Some investors attributed the rebound of the ferrous metals today to foreign media, as there were market talks that “Barclays predicted that China would announce another Rmb 5-10 trillion stimulus which will be implemented in stages. There were several editions of this, but seems coming from nowhere. We tend to think that the rebound today was due to the restocking of steel products data published by Gangyin.
According to Gangyin’s data, HRC destocked more than 6% but rebar at a lesser rate. This matches the performance of ferrous metals futures today.
For spot iron ore at ports, for example, PB Rizhao port was traded at Rmb755/ton today after the market closed, up Rmb20/ton vs. last Friday’s Rmb 738-739/ton. But recently this price has been in high correlation with the futures price, so it’s normal price fluctuations.
From the technical stand point of view, after iron ore futures 15-mins trend line showed bottom divergence, the price rebounded to the previous resistance level of Rmb767. Steel products are not following recently so we expect the iron ore prices could retreat in the short term. Watch out the support level of Rmb754.
©2024 iBlackmores® All Rights Reserved
