Chinese steel futures prices continued to slide on Wednesday, the last day before the 1-7 October national holiday. Seaborne iron ore traders meanwhile expect a further fall in prices on both steel and iron ore markets on their return in a week’s time.

The Kallanish index for 62% Fe Australian fines moved up marginally to $54.05/dry metric ton cfr Qingdao. There were no deals confirmed on globalORE but futures prices in Singapore also traded slightly up from Tuesday.

The January rebar contract on the Shanghai Futures Exchange closed down another CNY 18/t at CNY 1,821/t ($286/t), while the same contract for hot rolled coil closed down CNY 15/t at CNY 1,853/t.

Over 11-20 September major steelmakers produced 1.69 million tonnes/day of crude steel up 2.28% from the start of the month. Those mills claimed their finished steel inventories were down -1.06% over the same period to 16 million tonnes.

That inventory is higher than any figure from August and may still hide some inventory kept as semis or pushed onto traders. The fact that mills have been pushing high production volumes onto the domestic market is clearly evident in prices, which have fallen sharply over the last week.

Weak steel prices and little improvement in demand mean the production may not be sustained however. With iron ore port stocks already increasing for the last couple of weeks, this can only mean added pressure on iron ore prices. Little wonder then that market participants expect things to get worse before they get better.