Iron ore prices decline week on week as demand slackens before holiday

Import iron ore prices in China have indicated small rises today, Thursday, February 1, though indicating declines over the past week as sentiments have worsened together with demand.

Iron ore fines with 62 percent Fe content have increased by $0.7/mt today to $133.05/mt CFR. This level is $3.6/mt below that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated a rise of $0.8/mt on February 1 to $145.3/mt CFR, while down $3.65/mt week on week, SteelOrbis has learned.

The small rebound today has been fully sentiment-driven, according to market sources. China Development Bank and the Agricultural Development Bank of China said that they will provide credit worth RMB 142.6 billion for the renovation of "urban villages" in one of the largest Chinese cities, Guangzhou.

Six deals for a total of 223,000 mt of import iron ore have been concluded on February 1 at Corex. Two deals for 80,000 mt of 62.3 percent Newman fines each have been signed at $132.9/mt CFR and $132.7/mt CFR for shipment during March 6-15. Also, 30,000 mt of fines were traded at RMB 995/mt ($140/mt), for delivery at Caofeidian port, 10,000 mt of Carajas fines were transacted at RMB 1,095 ($154/mt), for delivery at Dongjiakou port, and 10,000 mt was booked at RMB 1,000/mt ($140.8/mt), for delivery at Dongjiakou port.

During the given week, import iron ore prices have moved down amid the slack demand from steelmakers as the Chinese New Year holiday draws closer. Most market players have already exited the market ahead of the long holiday, exerting a negative impact on the iron ore market. At the same time, inventory of iron ore has risen, and this trend will continue in the coming week, negatively affecting prices. It is expected that import iron ore prices may move sideways in the coming week.

Iron ore futures prices at Dalian Commodity Exchange have decreased by 0.36 percent, standing at RMB 968/mt ($136.3/mt) compared to the previous trading day (January 31), while decreasing by RMB 19/mt ($2.7/mt) compared to January 25.

As of Thursday, February 1, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,868/mt ($545/mt), decreasing by RMB 99/mt ($13.9/mt) or down 2.5 percent since January 25, while decreasing by 0.69 percent compared to the previous trading day (January 31).

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 7.1049