Iron ore prices decline gradually due to weaker steel market

Today, September 10, iron ore prices have declined compared to yesterday and also on week-on-week basis due to falling futures prices and weaker rebar and HRC prices in the local market.

Iron ore fines with 62 percent Fe content have moved down by $0.8/mt today to $126.2/mt CFR, down by $4.1/mt week on week. Brazilian iron ore with 65 percent Fe has edged down by $1/mt over the day to $139.5/mt CFR, while declining by $2.8/mt week on week, SteelOrbis has learned.

The number of deals for imported iron ore has increased today, Thursday, compared to early this week, but customers have been cautious, purchasing mainly based on indexes. Two deals have been done, for 170,000 mt of 61.5 percent PB fines concluded at the October 62 percent Fe index + $4.8/mt, with shipment for October 1-10, and 80,000 mt of Yandi fines + $1.2/mt. A contract for 80,000 mt of Mac fines has been done at October index + $2.6/mt.  

During the given week, demand for iron ore has slackened due to the production halt of blast furnaces in northern China on one hand and the worsening situation in the steel market on the other. Meanwhile, iron ore futures prices at DCE moved down, weakening the support for iron ore prices. Iron ore futures prices at Dalian Commodity Exchange have edged down by 2.26 percent today, coming to RMB 822/mt ($120.3/mt), while declining by 4.14 percent compared to September 3, amid prevailing cautious sentiment among market players.

However, iron ore inventory on Chinese steelmakers’ side is relatively low, which has prevented prices from recording any sharp drop so far.

A big price correction has been seen in the Chinese steel market, putting pressure on the iron ore market. On Thursday, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,640/mt ($533/mt), decreasing by RMB 150/mt ($22/mt) or 3.96 percent since September 3, while down 1.6 percent compared to the previous trading day.

As for the coming week, unloading efficiency has improved at Chinese ports, which will increase the supply of iron ore and negatively affect prices. It is expected that import iron ore prices in the Chinese market will edge down slightly in the coming week, if prices for steel do not rebound.

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 6.8331