Iron ore prices drop sharply, fall below $100/ton for the first time in over a month.

Iron ore prices have fallen to more than a one-month low amid dropping demand both for the raw material and steel products, as well as due to weak economic data.

 

Australian iron ore fines 62% Fe dipped by $1.5/t to $99.25/t CFR on the day, being below a $100/t CFR mark for the first time since November 18, while its futures decreased by $2.4/t on the DCE and $1.8/t on the SGX.

The steelmaking ingredient was affected mainly by worsened restocking activity by Chinese mills. “Weak reality hit the market, and slow iron ore demand pulled down the price. The raw material is dropping faster since mills are less active in rebuilding inventory,” an insider told Metal xpert. This deterioration of buying interest is explained by further reduction of BF operations: the capacity utilization rate at 247 Chinese steelmakers fell to 85.55% during the week of December 20-26, down by 0.58 p.p. compared to the previous week, according to Mysteel. No deals have been registered on platforms during the day.

 

Weaker steel demand affected iron ore market as well. Slower steel trade resulted in a slight increase of producers’ inventories, the first in two months, according to Steelhome data.

 

In addition, industrial profits fell by 7.2% y-o-y in November and by 4.7% y-o-y over the first 11 months of 2024, according to the National Bureau of Statistics (NBS), darkening expectations for China’s economy recovery.