21/11/2014 – Iron ore delivered to China falls below $70/dmt for first time in 5.5 years
Seaborne iron ore prices tumbled below the $70/dry mt CFR North China mark for the first time since June 2009, with the benchmark Platts 62% Fe Iron Ore Index being assessed at $69.75/dmt CFR North China Friday, November 21.
The last time the 62% Fe IODEX was lower was on June 3, 2009, when it was assessed at $69.50/dmt CFR North China, making the current price the lowest point in nearly five-and-a-half years, Platts data showed.
The current supply glut of iron ore, primarily a result of mining capacity boosts among major Australian and Brazilian miners, has turned the iron ore market squarely in favor of Chinese buyers, who have been holding back on purchasing spot cargoes. With so much material available for the taking, end-users were in no real hurry to buy.
Downstream factors also accounted for the slow uptake of ore.
With the weather turning colder in China, steel consumption falls because productivity in the construction industry, a major driver of steel demand in the country, wanes.
Consequently, buying appetite of iron ore, a core steelmaking raw material, is also curbed because mills try to keep inventories as lean as possible.
Source – Platts.com