Iron ore prices have lost about three percent today, Wednesday, February 26, after a visible drop in ore futures prices. Demand has been limited, but sentiments have been playing the main role in the price changes recently. Iron ore with 62 percent Fe content is down by $2.7/mt today to $87.3/mt CFR, while prices for fines with 65 percent Fe have lost $2.2/mt to $103.1/mt CFR.
There has been a deal for 170,000 mt of Brazilian blended fines at the April index with $2.5/mt extras. Also, customers are still purchasing small volumes for current needs from ports. Rising steel inventories have still been putting pressure on Chinese mills and, though the situation with local steel demand has started to improve, it will take time to come back to the normal situation, sources said. The fast spread of the coronavirus outside of China has put pressure on sentiments and led to a drop in futures prices. Iron ore futures at Dalian Commodity Exchange have lost 2.8 percent or RMB 18.5 ($2.6/mt) today to RMB 646.5/mt ($92/mt).
China has been reporting a lower number of new confirmed cases (an additional 406 cases on Wednesday morning), while most of them are in Hubei Province where the virus started. However, the number of infected people has surged in South Korea by 284 to 1,261 on February 26. Fears of a pandemic have increased because of the spread of the virus in Europe. France has reported its first death, confirmed cases in Spain rose by eight today, while new cases have been reported in Croatia, Austria and Switzerland. All this is putting pressure on futures prices for raw materials for steel, though there has been no direct impact on iron ore trading. Some sources said that iron ore prices have increased much on the back of news of lower supply from Australia and Brazil and now they need to adjust downwards, SteelOrbis has learned.