China's iron ore and steel prices bounced back on March 21 after three consecutive sessions of declines, buoyed by expectations of an increase in restocking demand from downstream users next month.
The most-traded iron ore futures in the Dalian Commodity Exchange rose 0.9% to 463 yuan/t ($73.13/t) by 0312 GMT. It touched 453.5 yuan/t, the lowest level since November 3 in the previous session.
"Demand release came a bit later this year, which dampened the confidence of the market. But it is almost certain that demand at downstream sectors will recover in early April," said Wang Yilin, steel analyst at Sinosteel Futures.
The most-active rebar contract for May delivery rose 0.5% to 3,654 yuan/t in early trade on March 21, after dipping its weakest in nearly five months in the previous session.
Inventory of steel rebar rose to the highest level since 2013 at 9.79 million tonnes as of March 19, data showed. Spot steel prices fell 0.5% to 4,179.48 yuan/t on March 20.
"Steel stockpiles at traders' warehouses started to fall since last week, indicating that demand has already showed a sign of improvement," said Wang.
Coke futures on the Dalian Commodity Exchange rose 1.1% to 1,966 yuan/t on March 21, their biggest intraday gain since February 26.
Coking coal contracts also climbed 1.5% to 1,305 yuan/t in the early trade.
BMI Research on March 21 raised the price forecast for coking coal between 2018 and 2020 to $180/t from previous $160/t. However, it maintained that prices would edge lower in the second and third quarters of this year, curbed by a continued slowdown in steel production growth in China.
The world's No.1 steel producer accounts for two-thirds of the global coking coal consumption.
Iron ore for delivery to China's Qingdao port fell 4.2% to $66.94/t on March 20, its lowest level in 3-1/2 months. The contract is on track for its worst month since September 2017, having plunged 15% so far this month.
Sources:sxcoal
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