Iron ore falls below $100/mt CFR amid weak demand and high supply

Import iron ore prices in China have seen decreases today, Thursday, July 25, falling to below $100/mt CFR due to weak demand and high supply. Even though iron ore prices have declined significantly over the past week, finished steel prices have also been dropping and mills remain in a difficult situation.

Iron ore fines with 62 percent Fe content have seen a drop of $1.15/mt on July 25 to $99.35/mt CFR. This level is $5.85/mt below that seen on July 18. Brazilian iron ore with 65 percent Fe content has decreased by $1.2/mt on July 25 to $115.65/mt CFR, while down $5.35/mt week on week, SteelOrbis has learned.

33 deals for a total of 634,300 mt of iron ore have been transacted on the Corex platform on July 25. In particular, one deal for 170,000 mt of 61 percent PB fines has been done at $98.7/mt CFR for shipment during September 2-11, and 80,000 mt of 60.5 percent Jimblebar blended fines have been traded at the August 62 percent index - $7.4/mt, for shipment during August 21-30.

During the given week, import iron ore prices have declined strongly as market players’ expectations of good domestic macroeconomic news have not materialized. Finished steel prices have moved down, weakening the demand for import iron ore and exerting a negative impact on prices. Some traders chose to sell at lower prices, aiming to reduce inventory levels. Lately, there have been too many iron ore supplies arriving at ports, negatively affecting prices. However, in the global market, there will be fewer shipments of iron ore in the coming period, especially from Australia, which likely bolster prices to a certain degree. It is thought that import iron ore prices may decline just slightly in the coming week.

Iron ore futures prices at Dalian Commodity Exchange have decreased by 1.55 percent today to RMB 764.5/mt ($107/mt) compared to the previous trading day, July 24, while decreasing by RMB 47/mt ($6.6/mt) compared to July 18.

As of July 25, rebar futures at Shanghai Futures Exchange are standing at RMB 3,329/mt ($467/mt), decreasing by RMB 163/mt ($23/mt) or 4.7 percent since July 18, while down 2.03 percent compared to the previous trading day, July 24.

Imported iron ore prices in China (week-on-week basis)

Price includes VAT.

Nationwide iron ore concentrate prices (66 percent Fe)

Price includes VAT. 

$1 = RMB 7.1321