Iron ore prices kept falling on Tuesday, August 6, as sentiments have remained bearish, steel prices kept falling and as the RMB’s depreciation has weighed on the appetites of Chinese customers. Prices of Australian iron ore fines with 62 percent Fe content lost another $3.05/mt during the day, coming to $97-97.5/mt CFR, SteelOrbis was informed. Brazilian 65 percent Fe fines have fallen to $108-108.5/mt CFR, down $2.75/mt from the previous day.
Demand in the seaborne market is still extremely low as most customers have preferred to wait for even lower prices. At the same time, some consumers have decided to replenish stocks by local ore or buy import raw material at ports with discounts. The RMB’s depreciation is making import of iron ore less attractive for Chinese mills at the moment. The exchange rate of the RMB against the US dollar kept going down on Tuesday, declining to RMB 6.9683 to the US dollar, after falling to a record low on Monday.
Iron ore futures at the Dalian Commodity Exchange have fallen to their lowest level since early July, to RMB 698/mt. Futures contracts at the Singapore Exchange came to $93/mt, losing $2.7/mt over the day. “Everybody has started to study where the bottom will be. Early this year I predicted $70/mt CFR. Today I am more optimistic. But the current level is still too high,” an Asian iron ore trader told SteelOrbis.
Steel prices in the Chinese market have continued to decline on Tuesday, not giving any support to iron ore and the trend is unlikely to change this week, market participants believe.