Iron Ore Prices Drop on Dalian Exchange

Iron ore prices fell 0.74% this Tuesday on the Dalian Commodity Exchange. The contract for January closed the day at 667.5 yuan, equivalent to 100.3 dollars.

The decline reflects a scenario of high supply within Chinese territory. The market is observing a outlook of reduced demand in the short term.

Local steelmakers are facing tight profit margins and are choosing to reduce inventory replenishment. The volume of ore stored at Chinese ports continues on an upward trend.

Mills' appetite for new purchases decreased following the replenishment period conducted before the recent national holiday. Consulting firm Anchof Futures notes that weak demand keeps prices under pressure.

This movement in the global commodities market tends to increase risk perception for emerging exporting economies and may pressure the dollar against the currencies of producing countries.