Seaborne iron ore prices experienced a sharp decline on Wednesday afternoon as investors lost confidence in the market. The Kallanish KORE 62% Fe index fell by $3.47/t to $106.19/dry metric tonne cfr Qingdao, while the KORE 65% Fe index slumped by $3.38/t to $121.94/dmt cfr. The KORE 58% Fe index also decreased by $3.07/t, settling at $93.63/dmt cfr.
On public trading platforms, a deal was struck for 170,000 tonnes of BRBF Fines at $105.9/t with a laycan of August 28 to September 6. Additionally, 170,000 tonnes of Newman Fines with 62.3% Fe were sold by BHP at $109/dmt CFR China, with a loading period of August 30 to September 8.
The bearish sentiment in the iron ore market comes amidst ongoing uncertainty surrounding steel production controls and a muted trading activity. Market participants, including both buyers and sellers, have adopted a wait-and-see approach, leading to fewer concluded transactions in the secondary market.
Despite the recent decline, seaborne iron ore prices averaged $159.43/dmt cfr over 2021, marking a 47.1% increase from 2020 and the second consecutive year of average prices exceeding $100/t. However, the outlook for 2022 appears less favorable, with subdued Chinese steel output, risks to steel demand for construction, and the potential impact of the Omicron variant on markets in the near term.
