Iron ore prices dropped on Friday August 11 after the ferrous markets cooled down following the China Iron & Steel Assn’s (Cisa) tempering the expected upside for steel prices at the year-end, and amid a general retreat in financial markets.
Key drivers China’s ferrous futures tumbled across the board during the day, with the benchmark contract of iron ore being the biggest loser – it shed 4.7% of its value. The weathervane billet price in Tangshan also plunged 80 yuan ($12) per tonne late in the afternoon. Market sources consider these movements a correction of the recent "overheat," especially since Cisa said the sharp rises in steel prices were driven by exaggerated expectations, rather than improved demand or less supply. Geopolitical issues concerning North Korea were also blamed for the general downturn in the financial markets, they added. Iron ore trading remained sluggish during the day, both in the seaborne market and at Chinese ports. Prices retreated, but premiums on index-linked seaborne cargoes remained stable.
Source: Metal Bulletin