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[SINGAPORE] Iron ore futures in China and Singapore slipped on Monday as traders struggled to sell cargoes in a market hurting from a glut in supply.
Iron ore for delivery in May on the Dalian Commodity Exchange closed 0.4 per cent lower at US$86) a tonne. The November iron ore contract on the Singapore Exchange fell 0.5 per cent to US$79.57 per tonne. "It's been difficult to conclude some deals because of the recent volatility in the market," said a Shanghai-based iron ore trader.
Spot iron ore prices rose to a near one-month high of US$83.10 a tonne in mid-October, after touching a five-year low of US$77.50 at the end of September, as Chinese mills replenished stockpiles.
But the gains proved fleeting as prices soon came off and traded below US$80 last week. Iron ore for immediate delivery to China eased 0.3 per cent to US$79.80 on Friday, according to data compiled by The Steel Index.
The steelmaking raw material dropped nearly 1 per cent last week, its first such decline in four weeks. "If the market goes up too quickly you worry whether the seller is going to perform on the deal. But if the price drops you worry whether the buyer would walk away. That's why we just want to get our hands on their LC (letter of credit) as soon as we can," the trader said.
Iron ore - the top revenue earner for global miners Vale , Rio Tinto and BHP Billiton - has struggled to recover since falling below US$100 a tonne in mid-May.
The commodity has lost 40 per cent of its value this year, hit hard by a flood in supply as China's demand growth slows.
Vale, Rio and BHP all mined a record amount of iron ore over the past quarter, aiming to edge out more high-cost suppliers to ship more cargoes to China as prices slide. "I still think we have yet to reach the bottom. There has been resistance from the market on the rally we saw earlier this month," said another trader in Shanghai.