Seaborne iron ore prices pulled back marginally, while Chinese steel futures prices move very slightly higher on Tuesday. Considering data showing that crude steel production and steel market inventories were falling steadily the move was small, but the weak Chinese economy is limiting any upside for steel prices.

The Kallanish index for 62% Fe Australian fines lost another $0.21/t to $52.84/dry metric tonne cfr Qingdao. There were three index-linked trades on GlobalOre. 170,000t of PB fines traded at a $3.5/t premium to the Platts 62% Iodex, 70,000t of PB lump traded at a $0.1505/mtu premium to the same index. A 110,000t cargo in the MNP basket also traded at a $2.5/t premium to Platts.

The January rebar contract on the Shanghai Futures Exchange closed up CNY 3/t at CNY 2,053/t ($), while the same contract for hot rolled coil closed up CNY 1/t at CNY 2,072/t.

China’s major steelmakers produced 1.6 million t/d of crude steel over the last 11 days of July, a 2.69% fall from the previous ten-day period. Unlike the previous period, falling output appeared to be having the desired effect on steel inventories. Finished steel inventories at mills were down 9.12% over the same period to 15.12 million t.

Although the mill inventory figure alone can be unreliable, the decline occurred in conjunction with a fall in market inventories monitored by MySteel. Steel inventories of rebar, wire rod, plate, HRC and CRC were down 3.1% over the last week of July to 10.77 million t.