The iron ore market has started the week from a sharp decrease in prices, as the spot market reacted on announcement of sintering production restrictions in Tangshan from today.
Iron ore fines with 62 percent Fe content have moved down by $5.6/mt today to $126.4/mt CFR. This level is the lowest since March 7. Brazilian iron ore with 65 percent Fe has dropped by $5.7/mt on March 20 to $142.2/mt CFR, SteelOrbis has learned.
The local governments in the cities of Tangshan and Handan in China’s Hebei Province have decided to implement production restrictions again as a level II emergency response as of March 20 and March 17, respectively, aiming to alleviate pollution. Local steelmakers will cut sintering output by 30-50 percent. The previous round of restrictions was from late February till March 10. These restrictions will impact the short-term iron ore demand and have resulted in worsening sentiments.
A deal for 80,000 mt of Jimblebar fines has been done at May 62% index -$4.3/mt, while a contract for 85,000 mt of Pilbara lumps has been signed at may index +$0.14/mt.
Iron ore futures at Dalian Commodities Exchange have fallen by 3.5 percent on Monday to RMB 883/mt ($128.5/mt).