According to an article published in Freight Investor Services, Dalian Commodities Exchange (DCE) closed lower on Tuesday for the second consecutive trading day this week.
Active DCE contracts
- The most actively iron ore futures contract on the DCE, for January 2020 delivery, dipped by 2.43% on-day to RMB 622.50 a tonne at the end of the afternoon session.
- In contrast, the most-active rebar contract on the Shanghai Futures Exchange, for January 2020 delivery, went up by 0.67% to RMB 3,477 a tonne at the afternoon trading session.
Slowdown ahead of National Day holidays
- Apparently, the buying appetite of Chinese end-users had slowed down due to upcoming China’s National Day holidays during the first week of October.
- Many end-users were heard to restock enough by the previous week to last their inventory throughout the holidays period in October.
- With just a week left before the holidays, the Chinese buyers are unlikely to commit to huge purchases of iron ore cargoes, except some last-minute small purchase of iron ore for production needs.
Strict output control for clear
- Iron ore demand might see a cool down over the short run due to stricter sintering and blast furnace output control.
- The production cut was imposed by the Chinese authority for mills located in Hebei province during September 22 to mid-Oct period, as part of a national-wide effort to improve air quality for the 70th National Day celebration during the first week of October.
- Moreover, the city authority of Tangshan had banned truck transportation in two Tangshan ports during Sep 22- 29, which limited cargoes purchases at docksides. Potential buyers will then have to buy cargoes from other regions instead.
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Source: FreightInvestorServices
