Iron ore price drops to $120/mt CFR after holiday amid high stocks, poor demand

Import iron ore prices in China have seen slight rises today, Thursday, February 22, after three days of constant drops with prices hitting $120/mt CFR. The iron ore price fall after the long holiday has been a surprise for the market as over the past 10 years prices had decreased after the Lunar New year holiday only twice.

Iron ore fines with 62 percent Fe content have increased by $0.6/mt today to $120.6/mt CFR. This level is $5.1/mt below that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated a rise of $0.5/mt on February 22 to $133/mt CFR, while down $5.65/mt week on week, SteelOrbis has learned.

Eight deals for a total of 232,200 mt of import iron ore have been concluded on February 22 at GlobalOre, including 170,000 mt of 61 percent PB fines at $119.05/mt CFR for shipment during March 30-April 8. Also, 10,000 mt of 56.74 percent Rob River lump has been sold at RMB 930/mt ($131/mt), for delivery at Qingdao port. In general, even though demand has improved a little on Thursday, it is still low.

During the given week, import iron ore prices in the Chinese market have moved down sharply amid the significant declines in iron ore futures prices. Only some downstream users are back to the market and so demand for iron ore has not improved significantly. Inventory levels of iron ore have increased, exerting a negative impact on prices. Many steelmakers’ blast furnaces have been under maintenance and so demand for iron ore may remain slack in the short term. Moreover, widespread cold weather has negatively affected construction activities, weakening the support for the iron ore market. It is expected that import iron ore prices may fluctuate within a limited range in the coming week.

Iron ore futures prices at Dalian Commodity Exchange have declined by 1.49 percent to RMB 893.5/mt ($125.8/mt) compared to the previous trading day (February 21), while decreasing by RMB 70/mt ($10/mt) compared to February 8.

As of Thursday, February 22, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,797/mt ($543/mt), decreasing by RMB 57/mt ($8/mt) or 1.5 percent since February 8, while increasing by 0.24 percent compared to the previous trading day (February 21).

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 7.1018