Iron ore prices for China have continued to go down today, Monday, September 21, dropping below $120/mt CFR, a level last seen in early August. Bearish sentiment in the steel market and environmental restrictions in northern China have put pressure on iron ore prices.
Prices for fines with 62 percent Fe content have today lost $5.8/mt from Friday, coming to $119.5/mt CFR. Brazilian iron ore with 65 percent Fe have declined by $6.4/mt to $132.1/mt CFR.
A contract for 170,000 mt of Brazilian blended fines with 62 percent Fe and low alumina content has been done at $120.05/mt CFR. Also, demand for lump ore has improved as customers have been trying to maximize efficiency. A deal for 80,000 mt of Newman lumps has been done with a $0.0550/mt premium. Also, there was a mixed cargo for lower grade fines and high grade lumps (around 240,000 mt in total) sold based on the index.
Sources said that falling futures prices have put big pressure on spot iron ore prices and that a further decline is inevitable. Iron ore futures at Dalian Commodity Exchange have closed at RMR 776/mt, down by RMB 23/mt ($3.4/mt) from Friday.
Demand from end-users in China has been slow as they are cautious as regards purchases, taking into account the recently announced environmental restrictions on sintering in Tangshan and also the continued downturn in the local long steel market.