Reuters reported that spot iron ore prices fell below USD 190 per tonne on Wednesday as Chinese steel mills continue to stay on the sidelines of the seaborne market as steel prices fall despite the traditional consumption peak season.
Steelmakers in China, the world top iron ore buyer and steel producer, have stepped away from imports and have preferred to buy domestic ore to lower production costs after offers inched above USD 190 per tonne last week.
An iron ore trader in Beijing said "Spot prices have fallen by USD 1 to USD 2 to below USD 190 per tonne this week and I am uncertain on the outlook for iron ore prices in the fourth quarter as construction activity will slow down reducing demand for steel and iron ore."
Shanghai rebar extended losses on Wednesday tracking Asian equities and other commodities amid euro crisis fears have discouraged steel mills from buying large volumes of the raw material.
The benchmark January rebar contract fell to a more than two week low of CNY 4,763 per tonne down by 0.4% from the previous close.
China is expected to extend its anti-inflation campaign and is unlikely to ease its tight monetary policy in the months ahead which will make it more difficult for steel mills to obtain sufficient credit for a large restocking of iron ore.
(Sourced from Reuters)
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