The slide in global iron ore prices continued on Monday, taking the key steelmaking commodity deeper into correction territory and into a bear market in the case of the lower quality 58% Fe fines produced by Fortescue Metals.
In fact, the falls on Monday pushed prices closer to a bear market (20% or more fall from the most recent peak – this time the all-time highs set on May 12) and in the case into a bear market with a slide of nearly 21%
Monday’s falls built on Friday’s big slump and ranged from a drop of $US8.30 a tonne for 62% Fe fines to $US11.40 a tonne for the higher quality 65% Fe fines from Brazil.
The price of 62% Fe fines (mostly from Australia) fell under $US200 a tonne for the first time since May 6 to $US192.42.
That takes the fall from the high on May 12 of $US237.57 to $US45.15 a tonne or 19%.
The price of the 58% Fe fines product (exported by the likes of Fortescue) is down $US43.75 a tonne, or 20.7%.
The price of the 65% Fe fines from Brazil is down $US43.50 a tonne from May 12’s peak of $US267.80 a tonne. That’s a fall of more than 16%.
The smaller fall for 65% Fe fines underlines the change in buying patterns by Chinese steel mills as they look for every advantage to lower polluting emissions from their sintering plants and blast furnaces.
The higher iron content in the Brazil 65% fines also gives a higher yield of crude steel than the 62% and 58% fines.
The 65% fines however are in short supply from Brazil, though Vale, the main exporter of this product, is boosting production by 50 million tonnes this year.