Chinese steel futures prices and seaborne iron ore prices rebounded on Tuesday after their sharp decline on Monday. Iron ore futures in China continued to slide however and prices are likely to remain volatile.

On the Shanghai Futures Exchange the May rebar contract closed at CNY 3,312/tonne ($471/t), CNY 79/t higher than Monday but that was still down CNY 188/t from before the holiday. The same contract for hot rolled coil rebounded CNY 66/t to CNY 3,312/t and was still down CNY 209/t from before the holiday.

The Kallanish KORE 62% Fe index rebounded $3.21/t to $82.70/dry metric ton cfr Qingdao after Monday’s dramatic $7.84/t slump. COREX saw the first deals since the holiday. 170,000 tonnes of Carajas fines sold at $99.6/t with a laycan in 2-11 February. 80,000t of Newman blend lump also sold at a floating price, while 5,000t of FMG Super Special sold from Jingtang Port at CNY 510/t. On the Dalian Commodity Exchange May iron ore settled down another CNY 19.5/t at CNY 587/t. It has now lost CNY 72/t since the return from the New Year holiday. On the Singapore Exchange meanwhile March 62% Fe futures settled up $2.78/t at $80.79/t.

The Wuhan coronavirus continues to see a sharp increase in both new confirmed infections and fatalities. Sadly, this appears to be likely to continue, at least in the near term. The final economic impact is even less straightforward to predict than the human one. Not only is the extent and duration of current policy uncertain, but policies to support the economy in the aftermath of the virus are also uncertain.

The People’s Bank of China has made some small moves however, which have been read as an attempt to reassure markets that it will intervene if necessary. It lowered interest on reverse repurchase agreements by 0.1%, and injected CNY 1.2 trillion in liquidity to interbank markets on Monday.