Seaborne iron ore prices fell again on Friday as the Chinese steel market continues to sink into the weak winter period. Continuing fears over real estate and production restrictions are impacting sentiment, but fundamentals suggest little improvement before the spring.

The Kallanish KORE 62% Fe index dipped $3.70/tonne to $109.10/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index dropped $2.93/t to $129.20/dmt cfr, and the KORE 58% Fe index fell $1.45/t to $85.24/dmt cfr.

On the Dalian Commodity Exchange, January 2022 iron ore settled down CNY 19/t at CNY 656/t ($102.72/t), while on the Singapore Exchange November 62% Fe futures settled down $6.96/t at $106.19/t. The same contract for 65% Fe and 58% Fe futures settled down $5.06/t at $124.29/t, and down $0.68/t at $87.80/t respectively. In Tangshan, billet prices were unmoved at CNY 4,900/t.

China’s iron ore port stocks increased sharply last week, adding further pressure to spot prices, by 6 million tonnes in a week to 142.82mt, according to a count by SMM. The two drivers were an increase in arrivals to ports, and the shutdown of blast furnaces in Tangshan ahead of the winter heating period.

Chinese steel market sentiment remains low with demand fading into the winter. Even heavy production cuts have not been enough to bring stocks significantly lower and the next significant shift in demand may not come until after Spring Festival. 

Fears over China’s real estate sector also continue despite Evergrande reportedly making another interest payment on Friday. Political meetings over the coming weeks may mean that more policy changes are announced, adding another layer of uncertainty to the market.