Reuters reported that spot iron ore touched 6 week lows as demand from top buyer China declined in tandem with falling steel prices, putting the raw material on course for its first monthly loss in 3.
For November, iron ore is down 2% after surging more than 30% over the past 2 months.
A Shanghai based trader said that the price could drop further towards USD 110 next week.
He said that "Some mills are still seeking cargoes but they prefer only those already at sea whose owners would be eager to sell at lower prices. There is no big interest for cargoes due in January."
traders said that miner Rio Tinto sold a cargo of 61% grade Australian Pilbara iron ore fines at USD 118.88 a tonne at a tender on Thursday, a dollar lower than a previous deal.
Traders said that vale sold 65% grade material at USD 123.01 per tonne, more than USD 3 less than before.
Mr Jamie Pearce head of iron ore broking at SSY Futures, who expects iron ore prices to be range bound towards year end as activity winds down said that "The Chinese are taking their foot off the gas on the tenders."
Weaker steel demand in winter, high steel output and the unwillingness of steel traders to restock due to tight capital will keep China's steel market under pressure, according to a report by the country's midsized steelmakers published on the website of industry group China Iron and Steel Association.
