On Monday, September 6, spot iron ore prices have dropped by almost $12/mt as compared to the end of last week, following a 6.7 percent fall in iron ore futures prices, because of worsening concerns regarding deeper steel production cuts in China this year.
Iron ore fines with 62 percent Fe content have slumped by $11.9/mt compared to last Friday, to $130/mt CFR. Brazilian iron ore with 65 percent Fe has tumbled by $10.1/mt to $152/mt CFR, SteelOrbis has learned. According to sources, falling futures prices and reports about more steel production cuts have led to “panic selling” in the iron ore market. Moreover, from September, many mills, especially in Hebei, have started severe sintering restrictions to support steel production cuts, which has also depressed demand for iron ore fines. As local iron ore production is not going to decline and the government is pushing for a 100 million mt increase in domestic iron ore production in the 2021-25 period, the import market will remain under pressure.
There have been no deals at trading platforms today, but demand at Chinese ports has been firm. At the same time, market sources have reported higher supply from Australia and rising stocks in China.
Iron ore futures at Dalian Commodity Exchange have lost 6.7 percent or RMB 51.1/mt ($7.9/mt) today, coming to RMB 723/mt ($112/mt).
$1 = RMB 6.4529