Benchmark iron ore (with 62 percent iron content) continued its slide this past month, falling from around $122 a tonne to $106.40 as of August 21. That’s a low not seen since December 2009.
The drop came in the wake of up to 4 million tonnes of canceled or postponed orders from China’s steel mills, which together consume the largest share of the world’s iron ore.
Weak demand has resulted in a big jump in iron ore inventories. There were 18.23 million tonnes at the Chinese port of Qingdao earlier this week, up 720,000 tonnes from the previous week, according to Reuters. That has dampened optimism that prices will stabilize soon.
Still, some traders feel that iron ore doesn’t have much further to fall. “We are looking to buy some tonnes, as iron ore prices may hit the bottom soon,” said a trader at the Chinese port of Dalian.