Spot iron ore prices in China remain unchanged on Tuesday as buyers
remain cautious over worries on slowing steel demand that dragged spot
iron ore prices to their lowest since March.
Some steel mills are beginning to
reduce their production because of their large volumes of steel products in
storage. So, Lower steel production may further dent demand for raw material
iron ore as index-based spot prices slid to more than six-month troughs on
Monday.
BHP Billiton sold 62.5-grade
Newman iron ore fines at $165/MT CNF, and 61.2-grade MAC fines at $161 at a
tender on Monday, down a steep $5 from a previous tender, said a Rizhao-based
trader said.
“Many iron ore traders are
selling their cargo at a very big loss. They just want to get rid of the cargo
and wait until there's a better time to enter the market again,” he said.
But a Singapore-based iron ore
trader said the BHP tender was limited to a few Chinese steel mills and so was
not a fair reflection of the market.
“We're seeing quite a lot of
buyers come back after Golden Week with a lot of interest. So it's evident there
are various end-users who need to buy. They're running on very low iron ore
inventories and if they want to continue producing steel they have to buy iron
ore,” he said, adding that his company sold a 62-percent grade Indian iron
ore cargo at $168 a tonne on Tuesday, above Monday's index level.
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