Iron ore prices decline from yesterday’s and last week’s levels as demand slows

Today, Thursday, August 27, iron ore prices have declined slightly from yesterday, while they have also shown a visible drop compared to the record high seen last week, mainly because of weaker demand from end-users.

Iron ore fines with 62 percent Fe content have declined by $2.5/mt today to $121.3/mt CFR, while Brazilian iron ore with 65 percent Fe has also moved down, to $134.5/mt CFR, $1.3/mt below yesterday’s level. Compared to a week ago, prices for iron ore with 62 percent Fe have lost $7.4/mt or 5.7 percent.

Two deals for 190,000 mt of iron ore have been reported at trading platforms today. A contract for 80,000 mt of 63 percent Newman blended lump has been signed at the September index + $0.03/mt. while 110,000 mt of Jimblebar fines with lower Fe content have been traded at the October index - $2.2/mt. Also, a number of trades have been reported from ports, mainly for mid-grade fines and lumps, but one deal for 20,000 mt of 65.8 percent pellet was concluded at RMB 1,080/mt ($156.5/mt), at Qingdao port. Most sources have indicated some slowdown of demand and a worsening of sentiment in the market due to stronger production restrictions (for sintering machines in particular) in Tangshan in late August.

Also, during the past week, import iron ore prices have moved on a slight downward trend due to rising shipments of iron ore, mostly from Australia, and increasing supplies arriving at ports. Fewer berths at ports in Australia and Brazil have been undergoing maintenance, which will increase iron ore supply in the near future.

Iron ore futures prices at Dalian Commodity Exchange have edged down by 4.1 percent today compared to August 20, coming to RMB 814.5/mt ($122.4/mt), while decreasing by 0.43 percent compared to August 26 amid prevailing cautious sentiments among market players.

Nevertheless, as the traditional peak season for steel demand in September and October is approaching, demand for iron ore will stay at healthy levels and will not fall much in the near future. It is thought that import iron ore prices in the Chinese market will fluctuate within a limited range in the coming week.

On Thursday, rebar futures at the Shanghai Future Exchange are standing at 3,717/mt ($539/mt), decreasing by RMB 39/mt ($5.7/mt) or 1.0 percent since August 20, while increasing by 0.24 percent compared to the previous trading day.  

Imported iron ore prices in China (week-on-week basis)

Price includes VAT.  

Nationwide iron ore concentrate prices (66 percent Fe)

Price includes VAT. 

$1 = RMB 6.8903