SINGAPORE, Mar 16: Iron ore futures in China and Singapore fell on Monday, pressured by weak investor appetite for the bulk commodity that has stretched losses this year amid a global glut.
Spot iron ore stayed near a record low below $60 a tonne as buying interest in top consumer China remained tepid. The weaker market is hitting traders that sell iron ore cargoes to China from smaller suppliers such as India particularly hard.
‘Business is very dull right now. We’re seeing almost no exports from India with prices at these levels,’ said a Shanghai-based trader.
Steep export taxes and freight charges make it unviable for Indian iron ore producers to sell overseas. India used to be the world’s No. 3 iron ore supplier until court-imposed mining and export curbs from 2010 aimed against illegal mining in key states constricted supply, leading to increased Chinese business for bigger suppliers Australia and Brazil. Some of those curbs have since eased but the costs have kept exports unprofitable. The most-traded iron ore for September delivery on the Dalian Commodity Exchange was down nearly 1 percent at 454 yuan ($73) a tonne by midday.
On the Singapore Exchange, the April iron ore contract slipped 0.4 percent to $56.50 a tonne. The losses in futures are piling more pressure on spot prices that last week dropped as low as $57.70 a tonne, the weakest since compiler The Steel Index (TSI) began publishing prices in late 2008.
Iron ore for immediate delivery to China <.IO62-CNI=SI> stood at $58.10 a tonne on Friday, up 0.4 percent on the day, according to TSI. The spot benchmark has lost another 18 percent this year after nearly halving in 2014. Signals that Beijing has the capacity to spur a slowing economy failed to boost sentiment. Chinese Premier Li Keqiang said on Sunday that the government has a lot of room to manoeuvre its policy and boost its economy having avoided using strong, short-term stimulus in recent years.
(AGENCIES)
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