Iron ore slumped to its two-month low since prevailing pessimism in market moods continued to put pressure on the raw material price.
Australian iron ore fines 62% Fe dipped by huge $12.5/t to $182/t CFR after its futures on the DCE plunged by RMB 87.5/t ($13.5/t) to RMB 1027/t ($159/t). Iron ore prices in both spot and futures markets were at their lowest since May 26. The steelmaking ingredient quotes posted a $19/t weekly drop for the second consecutive week.
The main reason for such sharp decrease was growing pessimism in the market, according to insiders.
Demand for iron ore has been dropping since mills in China started to cut production in July, some mills had lowered capacity by 20-25%.
China cancelled tax rebate for export of some steel products and increased export duty for high-purity pig iron. Besides, CISA has pointed once again at the importance of de-capacity and emission cut actions during H2 2021.