Iron ore prices in China have fallen further today, Wednesday, September 23, and have come closer to the $110/mt CFR mark, down from this year's peak of slightly above $130/mt CFR seen recently. Weak sentiment and insufficient demand in the steel market, in both the longs and flats segments, has put pressure on iron ore prices.
Prices for fines with 62 percent Fe have lost $3.8/mt today, coming to $113.7/mt CFR. The current price level is $11.6/mt lower than that on Friday last week because of the rapid decrease in the past three days. Brazilian iron ore with 65 percent fe has declined by $2.5/mt today to $127.7/mt CFR.
A contract for 90,000 mt of Mac fines with 60.8 percent Fe has been closed at the November index + $1.35/mt, while 100,000 mt of Yandi fines have been traded at the November index + $1.65/mt. Also, a cargo of 170,000 mt of Pilbara fines with 62 percent Fe has been sold at $110.6/mt CFR. Demand for iron ore in both the seaborne marlet and from ports has been modest as, on the one hand, many mills have been cautious in purchases, feeling prices will go down further, but, on the other hand, purchases have not fallen drastically as customers have continued to buy in line with needs ahead of the week-long holiday from October 1.
The main pressure on iron ore prices has been coming from the steel market, which is weakening and the outlook is still grim there. Average local rebar prices have declined by RMB 27/mt, while average HRC prices are down by RMB 50/mt since last Friday, according to SteelOrbis’ information. Weaker-than-expected demand for steel in the local market has made high iron ore prices unreasonable for the majority of buyers.
Iron ore futures at Dalian Commodity Exchange have lost RMB 5/mt today to RMB 766.5/mt.