Seaborne iron ore prices fell closer to $100/tonne on Tuesday. Scrap and billet prices followed as ferrous sentiment remains weak and production restrictions have further cut into raw materials demand.
The Kallanish KORE 62% Fe index fell $3.14/t to $102.75/dry metric tonne cfr Qingdao, the lowest level since 21 September. The Kallanish KORE 65% Fe index fell $3.13/t to $122.09/dmt cfr, and the KORE 58% Fe index dropped $2.64/t to $81.30/dmt cfr.
On the Dalian Commodity Exchange January iron ore settled down CNY 36/t at CNY 592/t ($92.55/t), while on the Singapore Exchange December 62% Fe futures settled down $6.22/t at $94.04/t. The same contract for 65% Fe and 58% Fe futures settled down $6.13/t at $113.12/t, and down $6/t at $76.20/t respectively.
Both scrap and billet prices were falling fast on Tuesday amid a sharp drop in both iron ore and steel futures. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta dropped CNY 37/t to CNY 3,576/t. Mills in Jiangsu were announcing several progressive declines in their purchasing prices over the day as market sentiment continues to slump. Meanwhile in Tangshan, billet prices slumped CNY 130/t to CNY 4,770/t.
Iron ore demand continues to be undermined by production restrictions. In addition to the large-scale reduction in production already seen, some areas of northern China have again seen short-term restrictions policies because of heavy pollution.