Prices for imported iron ore have fallen again today, Wednesday, April 3 and have dropped below the $100/mt CFR mark as demand has eased on the last working days before the holidays on April 4-5, after the rises seen on Monday and Tuesday. Also, the recent call by major rebar producers to the government to officially regulate production to stop the price fall may impact iron ore demand further in the coming few weeks.
Iron ore fines with 62 percent Fe content have lost $3.6/mt today to $99.4/mt CFR. This level is $1.6 /mt below that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated decline of $3.8/mt on April 3 to $111.1/mt CFR.
Two deals for a total of 97,000 mt of iron ore have been concluded at the Corex platform on April 3, including 90,000 mt of 60.8 percent Mac fines at $93.3/mt CFR, for shipment during April 26-May 5. Trading activity has slowed down both in the seaborn market and at ports as buyers have finished purchases ahead of the Qingming Festival (Tomb-sweeping Day).
A few large traders said that, apart from the already weak demand, the iron ore market has been affected strongly by the high inventories at ports.
Moreover, there are again concerns over the prospects for a strong demand revival from next week, following the news that 15 of China's major steel bar producers have sent a letter to the government, asking it to restrict steel output to support prices, which have fallen to "irrationally" low levels, as the China Iron and Steel Industry Association said. Though there have been some moves by local Chinese steel associations, urging mills to cut utilization rates by 20-50 percent, there have been no such restrictions at the national level, so some provinces are still producing at high volumes. If steel production restrictions are announced in the middle of April, they may further curb iron ore demand, but support mills’ margins.