During the last two weeks iron ore prices have continued the downtrend initiated in July, to fall back to the lowest price level seen since the end of January this year. On Thursday the 22nd of August the price of iron ore touched $83.34/dry metric ton cfr Qingdao, only to recover slightly at the beginning of this week and stabilise thereafter.

The main reason behind the fall of prices was the news of continuing steel production cutbacks in China as a result of lower steel prices. As the market started becoming weaker, traders initiated to offload iron ore ships at lower prices, triggering the current rapid fall in prices.

At the beginning of July iron ore levels surpassed $120/dry metric ton cfr Qingdao; currently the market is stabilising at around $85/dry metric ton cfr Qingdao, losing some $40/t in less than two months.

While a correction of iron ore prices was expected in the market after the spike seen in Q2, the fall happened quicker than expected, impacting the sentiment of the overall steel market as September approaches.