The Chinese Iron ore market hit a four-month low on Monday falling by over 4% as high inventory levels and a weak domestic steel market weighed on prices.
"Iron ore prices fell on physical demand concerns after Chinese policymakers told steel mills in the Wu’an area of the Hebei province to halt production until March 31” experts told Business Insider.
According to a survey by consultancy SteelHome quoted by Reuters, iron ore inventories at 47 Chinese ports stood at 159.18 million tonnes on March 16, having increased by 600,000 tonnes from the previous week.
The most-traded iron ore contract on the Dalian Commodity Exchange fell to 465 yuan a tonne, its lowest since November 16.
According to Metal Bulletin quoted by Business Times, the price for benchmark 62% fines tumbled 3.1% to $69.84 a tonne - just slightly above the recent low of $69.78 a tonne which struck on Wednesday.
Along with the iron ore dip, rebar steel futures have also seen a decline of 2.5%. The most-traded steel rebar contract was down at 3,644 yuan a tonne, having earlier fallen to its lowest since November 20. Experts added that concerns over steel demand are sharply driven by the rise in the steel rebar stockpiles.
The markets have seen a loss of 12% since the beginning of the month.
First Published: IST