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Prices lost their upward momentum after rising to their highest in three months, according to trading sources, some of whom disclosed that they were not holding on to cargoes.
Sales at Chinese ports had been weakening since Thursday, which puts some pressure on seaborne prices.
The slowdown in steel sales and softening steel prices have also triggered a drop in the futures market. The price of billet in Tangshan fell by 50 yuan ($8) per tonne in the late afternoon to 2,030 yuan ($305) per tonne.
A trading source in east China thinks the iron ore market will be well supported in August as long as there is strength in the steel market, which could experience some effects of stricter enforcement of environmental rules ahead of the G20 summit in Hangzhou in early September.
Quote of the day
“Enquiries dropped today. Most of them were only for high-grade fines,” the trading source said.
Rio Tinto sold 170,000 tonnes of 61% Fe Pilbara Blend fines, laycan August 24-September 2, at $58.51 per tonne cfr China via a tender.
Metal Bulletin’s 62% Fe Iron Ore Index stood at $60.70 per tonne cfr China on Thursday.
Vale offered 165,000 tonnes of 62.5% Fe Brazilian Blend fines at Metal Bulletin’s and Mysteel’s 62% Fe indices plus a premium of $3.65 per tonne on Global Ore. The shipment, which will depart from Malaysia on August 2, fetched a bid with a premium of $2 per tonne.
Pilbara Blend fines traded a bit lower at 440-445 yuan per wet tonne at ports in Shandong province during the day, compared with 445-450 yuan per wet tonne a day earlier.
The latest range is equivalent to $57.20-57.90 per tonne cfr China in the seaborne market.
Dalian Commodity Exchange – afternoon close
The most-traded September iron ore futures contract closed at 461 yuan ($69) per tonne on Friday, down 11.50 yuan ($1.70) per tonne from Thursday.
Seaborne iron ore market experienced a slight downward correction on Friday July 29 after going above the $60-per-tonne level a day earlier.