SHANGHAI Aug 24 Benchmark iron ore prices in China fell to $95
a tonne on Monday, easing 17 percent from its nearly one-year peak of $115 in
early August, as traders said many Chinese steel mills stopped buying ore for
Indian ore of 63/63.5 percent iron content for future delivery was quoted at
$95-98 a tonne, including freight costs, while ores for immediate delivery were
bid at about 780 yuan ($114) a tonne, industry consultancy Mysteel said on
Many steel mills in the largest producing country had been purchasing only
ores for immediate delivery for at least one week due to the rising
uncertainties in the steel market, which has weakened since early August, iron
ore traders said.
"Everybody knows the Chinese market is a volatile market, so steel mills
bought a lot when the steel market was booming and suspended purchasing as the
market is fading," a Shanghai-based steel trader said on Monday.
"We should not underestimate the momentum. India iron ore prices are likely
to fall to $90 tomorrow as some sellers are impatient now," said the trader, who
works for a major private-sector iron ore trading firm.
Another trader predicted that iron ore prices in China would
fall further, since many merchants had built up stockpiles when prices were
hovering near $80 a tonne.
Iron ore prices in Chinese domestic markets have been following steel prices
closely for months, partly because Chinese steel mills are setting up the
volumes of iron ore purchases with their production schemes and cash positions,
which are correlated with steel prices.
The surge of the iron ore prices in the Chinese market, which started in
early July, was also triggered by the Chinese government's detention of four
Shanghai-based employees of Australian miner Rio Tinto (RIO.AX)(RIO.L) on
allegations of illegally obtaining commercial secrets and bribery.
China claimed a small victory after it reached a slightly cheaper iron ore
price with Australian miner Fortescue (FMG.AX) this week, but talks with major
iron ore suppliers Rio, BHP Billiton (BHP.AX)(BLT.L) and Vale (VALE5.SA) are
The China Iron and Steel Association (CISA), the industry group and the de
facto negotiator represents Chinese steel mills in the price talks, have said
excess imports was a hindrance in talks.
However, a report by the China Business Journal said on Saturday that some
industry experts and steel mill officials had urged the central government to
replace some CISA's executives who are leading the iron ore negotiations.
They criticised CISA for its "foolhardiness" and lack of wisdom in the
negotiations, and for missing several chances to settle the price due to its
insistence on a 40 percent price cut, according to the Chinese-language
(Reporting by Alfred Cang and Edmund Klamann; Editing by Ken Wills)