Seaborne iron ore prices pulled back further from their dramatic gains on Friday, while steel prices also settled. Rebar was by far the best performer over the week however, with physical prices up sharply.

The Kallanish index for 62% Fe Australian fines fell marginally by $0.23 to $54.23/dry metric ton cfr Qingdao. Three fixed price cargos were confirmed on globalORE. 90,000 tonnes of Yandi fines traded at $48.5/t for September 5 delivery, down a full $2.5/t from Thursday. Two cargos in the MNP category also sold, one at $52.5 for September delivery and one at $51/t for October delivery.

Chinese steel prices meanwhile showed a vanishing of the margin between hot rolled coil and rebar as long product prices surged on falling inventories. Shanghai 20mm HRB400 rebar was trading at CNY 1,990-2,020/t ($320.5-325.3/t) on Friday, up CNY 90/t from a week earlier. 5.5mm Q235 HRC meanwhile was roughly steady at CNY 1,970-2,030/t.

The products also saw prices converge on the futures market. The January 2016 rebar contract on the Shanghai Futures Exchange closed down CNY 2/t on Friday at CNY 2,095/t, while the October 2015 HRC contract closed down CNY 1/t at CNY 2,050/t.

Short term demand for rebar is further evidenced by a wild distortion of the forward curve for rebar, sending near term prices higher than next year’s price for the first time. The modest decline for January 2016 rebar contrasted with another CNY 42/t surge in October 2015 rebar to CNY 2,117/t.