The seaborne iron ore market remained depressed on Tuesday December 1 after hitting new low a day earlier, with heavy smog in north China contributing to the pessimism. 

The Metal Bulletin 62% Fe Iron Ore Index now stands at $42.24 per tonne, a loss of $0.73. 

The Metal Bulletin 58% Fe Iron Ore Premium Index now stands at $37.73 per tonne, a loss of $0.42. 

Key drivers 
The main iron ore ports in the northern regions – Jingtang, Caofeidian, and Tianjin – were all closed during the day, with ships unable to berth due to poor visibility. 

Most construction sites in Beijing also had to be suspended due to the poor air quality, with visibility dropping to no more than 200 metres in the city, according to iron ore traders based there. 

The price of billet in China’s Tangshan region in Hebei province shed another 20 yuan ($3) per tonne to hit a new low of 1,460 yuan ($228) per tonne, including tax. 

Quote of the day
"It is not good for sales when the market is constantly under pressure as mills will hold back their orders to wait for a temporary bottom. It is also not a good sign that some steel mills are reselling their iron ore cargoes, especially high-grade fines" – a Shanghai trading source 

Trades 
Rio Tinto sold a 190,000-tonne cargo of 61% Fe Pilbara Blend fines, laycan on December 15-24, at $41.58 per tonne cfr China through a tender. This is the lowest price that the miner has secured through a tender for such materials since June 2012. 

A January-delivery cargo of 61% Fe Pilbara Blend fines was offered on the Beijing Iron Ore Trading Center at $40 per tonne cfr. It attracted a bid of $38 per tonne cfr. 

Vale offered a 170,000-tonne, January-arrival shipment of 65% Fe Carajas iron ore fines at the February average of the Metal Bulletin 65% Fe Iron Ore Index plus a premium of $1.50 per tonne on Global Ore. It received a bid at the same index level but without the premium. 

The Brazilian miner had failed to sell its January-arrival cargo of Carajas fines at a fixed price on Monday. 

Port prices
At ports in Shandong and Tangshan, prices for Pilbara Blend fines widened downwards by 5 yuan per tonne to 315-320 yuan per wet tonne. The range converts to a seaborne market equivalent of about $41.40-41.90 per tonne cfr. 

There were also sporadic trades involving PB fines on the market that were said to have been concluded under 315 yuan per wet tonne, but they could not be confirmed at the time of writing. 

Dalian Commodity Exchange – afternoon close
Most-traded May iron ore futures contract: 292.50 yuan ($45.70) per tonne, down 1 yuan ($0.20) per tonne from Monday. 

• [Editor:Chen Zhen Seng]