Sluggish demand drives down imported iron prices

Prices of imported iron ore at 25 major Chinese ports continued to decline last week as high inventories of both iron ore and steel products depressed prices, new data showed.

For the week ending March 3, the price index for iron ore imports with a 62-percent purity grade dropped 2 points from the previous week to 118. The index for imports with 58-percent purity also dipped 2 points to 106, according to the Xinhua-China Iron Ore Index report on Tuesday.

The index, compiled through research and analysis of 25 sea ports, also showed that the stockpiles of imported iron ore reached 101.04 million tons last week, up 0.69 percent from a week earlier.

The report said that the drop in prices came amid a decline of iron ore futures prices as well as sluggish market demand. Meanwhile, steel companies were more unwilling to produce because high inventories depressed prices.

The purchasing managers' index (PMI) for the steel industry dropped for a third month in February, hitting 39.9 percent, down 0.8 percentage points from January. The index marked a new low since September 2012, according to data from the Steel Logistics Professional Committee under the China Federation of Logistics and Purchasing.