Iron ore prices have softened today, April 1, after yesterday's slight increase, as despite persisting supply concerns prices in the Chinese finished steel market have moved down and market participants are worried about demand for the raw material. Prices for iron ore with 62 percent content have lost $1.2/mt today to $81.6/mt CFR, while Brazilian fines with 65 percent Fe have declined by $1.5/mt to $97.5/mt CFR, SteelOrbis has learned.
Today, a deal for 170,000 mt of Pilbara fines with 61 percent Fe has been done at $80.3/mt CFR for May shipment. About 90,000 mt of Mac fines also with about 61 percent Fe have been traded at the May index with a $1.4/mt discount. Overall trading has not been at a high level, but sources said that it has been enough to support iron ore prices at above $80/mt CFR so far.
Iron ore September futures at Dalian Commodity Exchange have declined by RMB 15.5/mt ($2.2/mt) today to RMB 573/mt ($80.7/mt), following the decline in rebar futures at Shanghai Future Exchange by RMB 76/mt ($10.7/mt) to RMB 3,169/mt ($446/mt). Some sources said that demand for longs has been overestimated in the past week, which put pressure on prices. Moreover, decline in the flat steel segment has been even sharper. HRC futures have dropped by RMB 91/mt ($13/mt) or by three percent today to RMB 2,999/mt ($422.4/mt).
Though there are still worries about lower global supply of iron ore, overall demand for the raw material worldwide has also been weakening sharply, due to the lower need in Europe, Japan and other countries. Brazil-based Vale has said that, according to their calculations, supply up to 18 million mt may be interrupted in the global market. At the same time, according to the expectations of CITIC Securities, iron ore demand in Japan, South Korea and Europe may drop by 20 million mt in the second quarter this year, offsetting supply losses.