China's imported iron ore prices dropped slightly this week as market sentiment was hit by weak steel prices.
Spot prices of 63.5% Indian fines on Friday May 4 were at $147-148 per tonne cfr, unchanged from Thursday’s levels but down $1 for the week.
"Steel mills still have some stockpiles, so they are not that eager to enter the market and are expecting the prices to fall further," an iron ore trader in Shandong told Metal Bulletin.
"Trading volume is quite thin this week as most participants are waiting for a clearer direction," a steel mill source in Beijing said.
Vale offered 156,071 tonnes of 62.88% Fe standard sinter fines on Friday. Sources told Metal Bulletin that they expect a price of about $144-145 per tonne cfr.
The Brazilian company concluded a tender at $152 per tonne cfr for 113,257 tonnes of 64.13% Fe lumps on Thursday.
Sesa Goa sold 54% fines at $112.50 per tonne cfr and 52% fines at $102.50 per tonne cfr on Friday, with the price of the first cargo being $1 higher than a similar one on April 26.
"Tender prices are very firm, but I do not think this reflects the current market well. The downward trend of prices is likely to continue, and people who dare to bid such prices will have to pay the penalties themselves," a trader in Shanghai said.
Spot prices are likely to edge lower next week, several market participants said.
"As things stand, the sluggish steel market will likely drag down iron ore prices into a tight range, and there is little momentum for it to rebound in the short run," the Shanghai trader said.
"However, steel prices may be near the bottom," the steel mill source in Beijing said, adding that if the steel prices continued to drop, some producers would simply cut output to reduce losses.