The price of Australian 62% Fe grade iron ore fines bound for China fell for a fifth consecutive trading day yesterday (May 20), dropping by US$0.55 to US$109.20 per ton, touching a three-week low. The decrease brought the five-day cumulative loss to US$3.95, a decrease of 3.5%. This pullback left prices down by 0.5% this month but still up by 2.53% for the year.

High levels of molten iron production and decent steel mill profits prevented a deeper price crash. In addition, a rebound in Chinese spot steel trading volumes and stabilizing domestic ferrous futures provided support to iron ore prices.

Market participants expected volatile fluctuations ahead. Increased shipments from Australia and Brazil put supply pressures, and overall market sentiment has weakened. Nevertheless, rising ocean freight costs and a minor reduction in Chinese port inventories provide counter-balancing support.