Sentiments in the iron ore market has visibly weakened, though trading in the spot market has been halted this week due to the Chinese New Year holidays. The spead of the coronavirus outbreak in China has increased concerns about the recovery of steel and iron ore demand after the holiday. As a result, iron ore futures prices at Singapore Exchange for February contracts have lost 8.8 percent or $8.03/mt since Friday, dropping to $83/mt today, Tuesday, January 28.
The Dalian Commodity Exchange in China has announced today that it will restart operations on Monday, February 3 instead of Friday, January 31. This follows the government announcement of an extension of the New Year holiday. Moreover, Shanghai municipal government and Zhejiang provincial authorities announced yesterday that enterprises will return to work only on February 10. In Tangshan public transportation has been halted to stop the spread of the coronavirus. Such emergency measures have followed the worsening of the situation in China, where confirmed cases of the coronavirus exceeded 4,500, while the death toll has surged to 106, according to the latest information from the Chinese authorities.
At the moment, delayed resumption of construction activities, commodities trading and industrial production in China is inevitable, and so the outlook for the trend in the iron ore segment is bearish. Taking into account recent news, prices for iron ore fines with 62 percent Fe content are assessed at about $85/mt CFR, but this level is indicative, reflecting the mood in the market where spot trading is halted. On the last working day before the holidays, the price was at $93.3/mt CFR, according to SteelOrbis’ data.