The most traded iron ore contract on the China Dalian Commodity Exchange ended the week at 899 yuan ($124.91), marking a 6.5% decline. The March iron ore benchmark on the Singapore Exchange also started the week with a 5.6% decrease.
Analysts suggest that abundant supply and slow demand recovery will continue to suppress prices in the near term, limiting price increases even with the steel production component.
The train accident in Brazil could result in a potential disruption in iron ore supply, causing prices to rise. However, analysts anticipate the impact to be limited, expecting prices to start falling again in the coming weeks.
Steel production in China has shown a decline in recent weeks, reflecting in the demand for iron ore. Daily crude steel output among steelmakers decreased by 0.5% to 2.24 million tons over the past week.
Other components of steel production have also experienced declines. Prices of coking coal and coke have decreased, while prices of construction steel and hot-rolled coil have remained steady. Stainless steel prices, however, have seen an increase.
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