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PrintChina steel futures fell to an all-time low on Wednesday as poor demand in the world's top steel market kept the pressure on prices, sending iron ore further below $90 a tonne to its weakest since October 2009.
Iron ore prices have dropped 36 percent since early July, the main casualty among industrial commodities of China's slowdown, and analysts say they have further to fall.
"There may be more downside, unfortunately, given the high iron ore inventory in China and no sign of recovery in steel demand. Iron ore demand is very, very weak," said Helen Lau, senior commodities analyst at UOB-Kay Hian in Hong Kong.
Iron ore stockpiles at major Chinese ports stood at above 98 million tonnes last week, not far off the record high of around 101 million tonnes set in February.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI fell 2.5 percent to $86.90 a tonne on Tuesday, according to data provider the Steel Index.
A drop in Shanghai steel futures to a record low on Wednesday pointed to further losses for iron ore.
Lau said she is looking at $70 or $75 as possibly the "lowest point" for iron ore prices.
The most-traded rebar for January delivery on the Shanghai Futures Exchange fell to as low as 3,218 yuan ($510) a tonne, its weakest level since the bourse launched rebar futures in 2009.
Rebar, or reinforcing steel bar that is used in construction, closed down 1.7 percent at 3,228 yuan. Rebar has dropped 4.8 percent over three sessions, the biggest three-day drop since October 2011.
"Shanghai rebar is falling like there's no tomorrow," said an iron ore trader in Shanghai.
ENQUIRIES REMAIN SCARCE
Enquiries from potential iron ore buyers remained scarce.
"Some people are asking if I'm dead yet," said another trader based in Hong Kong.
The steep decline in iron ore prices has forced Chinese steel mills to walk away from supply contracts with miners amid a slowdown in the world's No. 2 economy.
"There is no doubt steel intensity use in China is abating," said Tom Price, commodities analyst with UBS in Sydney.
Price said he expects to see a rebound in demand for imported ore in China in the final quarter of 2012 following the traditionally weak third quarter, when Chinese steel mills typically run down inventories.
Chinese steel prices, which have fallen about a quarter from this year's peak, are likely to sustain their downward trend this month, said Qiu Yuecheng, an analyst with Xiben New Line Co Ltd, a spot steel products trading platform in Shanghai.
"Iron ore prices are unlikely to fall sharply as they have earlier, but it will not be easy to recover to previous record levels anymore without any positive drivers," Qiu said.（Source: Reuters）
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