Spot iron ore market
in China remains deserted over thinning down of buying interest and uncertainty
in global economy.
Signs of slowing steel demand in China had also been
weighing on steel prices. The most-active January rebar contract on the
Shanghai Futures Exchange fell as much as 2.7 percent to 4,282 yuan a tonne,
its lowest ever. It closed down 2.4 percent at 4,298 yuan, putting its loss so
far for the week at nearly 5 percent, and for the month at more than 11
percent.
The steep decline in steel prices could prompt Chinese mills
to cut output after producing at an accelerated pace for most of the year.
“Now that the steel price is almost close to break-even
point for some mills, if the situation continues after the holiday, some mills
especially the small ones may curb some production,” said a purchasing
manager for an iron ore trading firm in Shanghai.
“They will wait and see how the market will be after
the holiday before taking any decision on raw materials. But the general
feeling is that the markets, both steel and iron ore, could continue to drop
after the holiday,” said a Shanghai-based purchasing manager.
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