Prices for import iron ore in China have fallen below the $95/mt CFR mark, the lowest level this year, as the fundamentals have weakened further and there are no signs of an improvement in the near future. The recent poor PMI data for May in China and the new wave of trade war, coming from the US, have put pressure on sentiments.
Iron ore with 62 percent of Fe content has settled at $94.5/mt CFR on June 3, down by $1.75/mt from the previous working day last Friday, while ex-Brazil fines with 65 percent of Fe content are priced at $104.45/mt CFR, falling by $2.1/mt from May 30.
Today, 18 deals for 856,000 mt of iron ore in total have been signed at the Corex platform, including two contracts for 170,000 mt of 61 percent Fe PB fines each done at $91.45/mt CFR and $91.1/mt CFR for July 9-18 shipment. Also, 50,000 mt of 58 percent fines were traded at RMB 663/mt ($92.1/mt), for delivery at Tianjin port, while 50,000 mt of 60.6 percent Fe Mac fines were transacted at RMB 723/mt ($100.4/mt), for delivery at Tianjin port.
In May, the purchasing managers index (PMI) for the Chinese steel sector dropped again below the 50 percent mark, to 46.4 percent, 4.2 percentage points lower than that recorded in April, signaling weak demand and steel production, thereby weakening the incentive to buy expensive raw materials. As for June and July, the outlook is also bad and so mills will buy iron ore only at discounts in the near future.
Furthermore, the market has been impacted by the news that the US Section 232 tariffs applied to all steel and aluminum imports will be raised to 50 percent from 25 percent, effective from Wednesday, June 4. “The turbulence between the US and China continues. Demand is weak, so iron ore should go to $90/mt CFR,” a market source said.
