Spot iron ore prices fell to their lowest in almost three weeks as a softer steel market in top consumer China sapped buying interest for immediate cargoes and weaker Dalian ore futures pointed to further losses.
The price declines came ahead of Chinese economic data due later in the day that should provide more clues on the health of the world’s second biggest economy. Those figures due out at 0530 GMT include industrial output and retail sales for July.
While recent data have shown strength in China’s factory activity and exports, a weaker services sector and imports suggest more stimulus measures may be needed to ensure a sustained recovery.
Tuesday’s drop was the steepest for iron ore since it lost more than 2% on June 16 when it touched USD 89, its cheapest since September 2012. The price of the raw material that is the top revenue earner for global miners Rio Tinto and Vale has fallen nearly 30 percent this year.
Offers of iron ore cargoes remain plenty, said an iron ore trader in Shanghai who is also selling shipments for Chinese steel mills that have excess stocks from their long-term contracts with miners. It’s not easy to locate a buyer because there’s a lot of competitors selling similar types of cargo in the market.
Source – Reuters