Spot Iron ore prices have fell down by 30 percent this
month, its biggest fall since August 2009 as thin demand from top buyer China
forced traders to sell at a loss.
Highlights of the
week:
* Offers for Fe
63.5/63 of Indian fines dropped sharply to reach as low as $ 130/MT (CNF), i.e.
down by $ 20/Mt from the last week.
* There were a lot of distressed cargoes in the spot market,
or shipments that traders needed to sell because they didn't have enough funds
to hold them and wait for prices to recover.
* Inventories of imported iron ore at major Chinese ports ended
this week at 92.74 million tonnes i.e. up by 520,000 tonnes from the end of
last week.
* A sharp drop across iron ore price also prompted a choppy trading on the OTC iron ore market. Forward swaps prices for October contract fell to reach $151/153/MT.
“The situation is still very bad. There are some mills
which are starting to buy but they're only willing to pay a very low price,
even lower than the current spot market rate,” said a physical iron ore
trader in Shanghai.
However, according to analysts, “prices have neared a “floor” and there are chances for a rebound to as much as $30 a metric ton to near $150
a ton in coming weeks. The scale & speed of this week's correction has
little to do with trade fundamentals. The reported collapse in trade liquidity
instead suggests a 'buyer's strike', with consumers deferring purchases until
prices stabilize.”
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