Seaborne iron ore prices hit the lowest point ever assessed in the history of the benchmark Platts 62% Fe Iron Ore Index assessment. The 62% Fe IODEX price lost $1.25/dmt on the day to be assessed at $54/dmt CFR North China.

Before this, the lowest point of $55/dmt CFR North China was reached respectively last week on March 20, 2015, and almost 6.5 years ago on November 4, 2008, in the midst of the global financial crisis.

Industry participants were pessimistic about the outlook on the iron ore market as buying appetite continued to shrink in China, the world’s largest consumer of iron ore for its steelmaking needs. Recent crude steel output cuts have been enforced among some mills due to greater regulatory pressure from the government to reduce emissions among steel mills, major contributors to the country’s pollution problem. Iron ore, as a core steelmaking raw material, has suffered from poorer demand as a result.

With steel prices unable to recover, mills were also heard to be suffering with weaker margins, and some were looking to mitigate their losses by cutting production and leaving offline blast furnaces that had earlier been going through maintenance.

The average daily crude steel output of key Chinese mills over the period of March 11-20 was 1.6492 million mt, down 1.92% from early-March, according to data from the China Iron and Steel Association.

On the supply front, a constant flow of Australian and Brazilian ores into China was also putting pressure on an already weak market. Market sources said they were in no real hurry to purchase spot cargoes as they were aware of the widespread availability of tonnages both on the seaborne and port stock markets.

Source: Platts