China iron ore: Slow buying weighs on prices

Seaborne prices continued to slide as mills slowed iron ore purchases.

The Argus ICX 62pc seaborne fines price fell by $1.70/dry metric tonne (dmt) to $65.05/dmt.

Trading volumes were affected by market participants travelling to Singapore for the SGX Iron Ore Week. Global mining companies, Rio Tinto, BHP and Vale will present their views on the iron ore market on 24 May. The conference is taking place amid a stable iron ore pricing environment, with the Argus ICX price moving in a tight band of $63-69/dmt since late March. But there are signs that support for iron ore prices may be waning as rains are likely to arrive in south China soon, slowing construction activity and reducing demand for steel and iron ore. Conference participants are expected to discuss the outlook for 2018, which is largely bullish given continued robust investment growth in real estate, the key demand driver for China's steel markets.

Buyers are expecting the iron ore price fall to accelerate and may not enter the market over the next few days, an eastern China-based trader said.

The thaw in trade frictions between the US and China did not inspire much confidence, with no clarity on whether the 25pc steel import tariff imposed by the US would be put on hold.