Chinese iron ore prices have fallen by 17% in the last two weeks, as iron ore futures price stood at CNY364.50 (USD58.70) per tonne on the Dalian Commodity Exchange as of 10 July.
Price of iron ore 62% Fe delivered to Qingdao dropped 10% to USD44.59/tonne on 8 July, according to Metal Bulletin, which was the lowest price on record dating back to May 2009.
Iron ore inventories at Chinese ports rose to 82 million tonnes on 3 July, dragging down the prices to the bottom, according to data from Standard Commodity Trade Center, a commodity data provider in China.
Data from China Iron and Steel Association (CISA) showed that the daily output of crude steel at major mills decreased by 1.4% month-on-month to 1.7 million tonnes in the middle of June, and the daily iron output also dropped 2.74% than the previous month to 1.7 million tonnes.
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The oversupply of iron ore in China has not eased at all as inventories at ports keep on rising, even while steel mills have suspended operation for maintenance. These have all led to the slump of iron ore prices in China, Tian Xinyuan, an industry analyst from Fangzhen Securities, told IHS Maritime.
The government’s giving approval to Valemaxes calling at Chinese ports will increase the exports from Brazil to China, bringing pressure on iron ore prices, Tian noted.
China’s recent stock plunge indicated the lack of confidence in China’s economy, which dampens the demand outlook for industrial commodities, stated an analyst from Huatai Futures.