Iron ore prices were crunched on Thursday with prices down more than 4% in what has been a slow fade from the multi-year highs earlier this month.
Prices for the key 62% Fe fines product produced predominantly in Australia are now down almost 10% since January 18.
The fall coincided with the instability on Wall Street and other equity markets – but not in commodity markets such as oil and gold.
The slump in iron ore prices was ignored by ASX futures trading who were focused more on the rebound on wall Street as the great short squeeze eased after some trading platforms imposed tougher margin requirements and restrictions (as commodity and equity platforms have done in the past when gold and silver and Chinese shares have overheated).
ASX 200 futures were showing an 84 point gain for the start of trade later this morning, but traders seem to have ignored the worrying slump in iron ore prices.
The price of the 62% fe fines product dropped 5.5% or $US9.17 a tonne on Thursday to $US157.42, while the price of the 65% Fines product (mostly sourced from Brazil) dipped a smaller 4.4% or $US8.10 a tonne to end at $US182.10, according to data from the Metal Bulletin’s FastMarkets service.
The 62% price is down more than 9.5% or $US16.65 from the $US174.07 a tonne price on January 18, while the 65% product’s price is down from the January 18 peak of $US195.50.
Trade reports didn’t attribute Thursday’s slide to any one factor – weak demand and weakening steel mill margins were mentioned.
Others said the sector is starting to focus on government efforts to cut steel production this year (which is part of the new five year plan for the steel sector), but no one is volunteering to reduce capacity.
