SHANGHAI, China Chinas imported iron ore prices tumbled Wednesday due to panic selling and a complete lack of confidence.
Mainstream spot prices for 63.5-percent iron content Indian fines were between $111 and $113 per tonne c.f.r. China, down $4 from Tuesday to the lowest level since December 2009.
"The market is collapsing, and it is inevitable that prices of 62-percent iron fines will drop below ... $100 per tonne c.f.r. soon," an iron ore trader in Shanghai told AMM sister publication Metal Bulletin.
Steel prices also are falling. Billet in Tangshan traded at 3,050 yuan ($480) per tonne Wednesday, 40 yuan ($6.25) below the previous day, and rebar futures on the Shanghai Futures Exchange fell for the eighth consecutive working day, with the January contract settling at 3,583 yuan ($564) per tonne.
"I do not see any significant steel production cuts in place in the short term due to China forcing companies to continue to produce to meet the GDP (gross domestic product) target for 2012. Also, the change in (top) leadership requires social stability. Shutting down blast furnaces will cause unemployment," a Hong Kong trader said. "For the short-term outlook, until the end of September, I believe iron ore prices will continue to decline to around $95. The flood of iron ore spot material from Rio Tinto and BHP Billiton after steel mills defaulted on their long-term contracts will put pressure on iron ore prices."
On Chinas Global Ore trading platform, 90,000 tonnes of 62-percent iron content Australian fines traded at $105 per tonne c.f.r., and 80,000 tonnes of 58-percent iron Australian fines changed hands at $94.50 per tonne c.f.r. Wednesday.
Iron ore deliveries to China slipped to 57.87 million tonnes in July, down 0.8 percent from the same month last year, according to Chinese customs data released Wednesday.