Iron ore prices tumble by 7.6% to lowest since early April due to demand worries

Import iron ore prices in China have dropped sharply today, Thursday, August 5, coming to their lowest level since early April, following the drop in futures prices which has reflected the poor outlook and the many uncertainties for iron ore demand in the coming months.

Iron ore fines with 62 percent Fe content have fallen by $13.9/mt or 7.6 percent compared to August 4, to $168.3/mt CFR, according to SteelOrbis. This level is $25.35/mt below that seen a week ago on July 29. The last time the iron ore price was lower than the current level was on April 4.

Brazilian iron ore with 65 percent Fe has moved down by $13.3/mt on August 5 compared to August 4, to $200.9/mt CFR, down $27.1/mt week on week, SteelOrbis has learned.

No deals at trading platforms have been seen today, reflecting weak demand. Trading has been moderate for the whole of this week.

Import iron ore prices have continued their downtrend, while transaction activities have been at low levels amid continuous production restrictions. Real demand for import iron ore has slackened sharply, exerting a negative impact on spot prices. At the same time, the outlook has remained unclear. Though early this week rumors were spread in the market that China would not ask mills to cut crude steel production, market sources say that for now the demand worries still exist and that the market situation is bearish. Most major mills have not voiced their intention to increase production any time soon.

The maintenance works at berths at ports have reduced shipments of iron ore from Australia and Brazil: however, the volume of iron ore arriving at Chinese ports will likely increase following the end of the typhoon. It is thought that import iron ore prices may remain under pressure in the coming week.

Iron ore futures prices at Dalian Commodity Exchange (main contract i2201) have moved down by 4.72 percent today, coming to RMB 888.5/mt ($171.6/mt) compared to August 4, while decreased by RMB 92/mt ($14.2/mt) or 9.4 percent compared to July 29.

As of Thursday, August 5, rebar futures at the Shanghai Futures Exchange are standing at RMB 5,373/mt ($831/mt), decreasing by RMB 380/mt ($59/mt) or 6.6 percent since July 29, while increasing by 0.26 percent compared to the previous trading day (August 4).

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 6.4691