Iron ore prices collapsed on Monday as confidence evaporated in both raw materials and steel markets in China. Prices fell at the fastest pace recorded as traders aimed to dump positions into the falling market.

The Kallanish KORE 62% Fe index slumped $7.36/t to $64.71/dry metric tonne cfr Qingdao, the lowest level since July. COREX saw trades done at sharply lower prices than in recent months. 170,000t of PB fines sold at $62.50/t with a laycan in 19-28 December, with another 170,000t trading at a floating price. 80,000t of Carajas fines also sold at $81/t for December delivery.

On the Dalian Commodity Exchange January 2019 iron ore settled down CNY 24/t at CNY 483.5/t ($69.64/t), while on the Singapore Exchange December 62% Fe futures settled down $4.35/t at $62.78/t. Billet prices in Tangshan have also fallen sharply, losing CNY 150/t on Monday following a net CNY 80/t decline over the weekend.

The realisation that steel prices are close to falling to near cost levels has had traders selling off positions before prices fall further. This accelerated the decline in recent days. Mills have held off buying and are adjusting their purchasing strategies towards buying lower cost ores. That has left the iron ore market with little support until steel spot and futures prices bottom out.