Iron ore prices fell back below $100 per tonne at the end of September

Unlike at the start of the month, iron ore prices on the Chinese market fluctuated within a narrow range for the rest of September, falling below $100/t.

According to Kallanish, iron ore prices (KORE 62% Fe/Qingdao) stood at $96.6/t CFR as at 25 September, which is 4.2% lower than at the start of the month (4 September).

Market sentiment in the second half of September was influenced by renewed calls for production cuts in the steel industry and weak fundamentals at steelworks, in particular falling margins. The brief recovery in both futures and spot prices during this period was driven by buyer activity as they restocked ahead of the holidays.

Towards the end of this week, trading activity remained subdued, as market participants began preparing for the holiday period from 25 to 27 September (Mid-Autumn Festival). Rising port stocks also put pressure on prices. Chinese steel mills had largely completed their pre-holiday procurement. Some of them continued to keep a close eye on Brazilian shipments amid growing concerns over potential supply cuts and rising delivery costs.

In the near term, demand for ore is likely to fall significantly. This week, Chinese steelmakers have stepped up the volume of scheduled maintenance on their blast furnaces. Furthermore, some of this work is due to begin in late September or early October. A decline in pig iron production is also forecast from next month, against a backdrop of weak steel demand and low profitability at steelworks.

It should be noted that, as of early September, iron ore prices (KORE 62% Fe/Qingdao) had rebounded to over $100/t CFR, whilst in August this commodity was mainly trading within a narrow range of $95–98/t.