The seaborne iron ore market accelerated its decline on Tuesday, as steel mills struggled to make ends meet, which may lead to more production cuts.

The Kallanish KORE 62% Fe index and the KORE 65% Fe index lost $2.79/t and $3.08/t respectively on Tuesday to $116.03/dry metric tonne cfr Qingdao and $124.15/dmt cfr. The KORE 58% Fe index meanwhile declined by $1.68/t to $107.66/dmt cfr.

90,000 tonnes of Newman fines and 170,000t of BRBF were sold at $114/t and $115/t respectively, with shipment in November. Meanwhile, 90,000t of BRBF were booked at a floating price with delivery next month.

On the Dalian Commodity Exchange (DCE), January 2024 iron ore slumped by CNY 14.5/t ($1.98/t) to CNY 819/t ($112/t). On the Singapore Exchange, November 62% Fe futures and November 65% Fe futures settled $1.54/t and $1.59/t lower respectively at $110.78/t and $120.78/t. The same contract for 58% Fe futures, meanwhile, was unchanged at $104.36/t.

Scrap and billet prices both sunk deeper. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta was CNY 30/t lower at CNY 2,807/t ($384/t). Tangshan billet meanwhile fell by CNY 30/t to CNY 3,420/t ($468/t).

The iron ore market is expected to experience frequent fluctuations in the short term, influenced by weak steel market performance but strong sentiment on imported iron ore.

Chinese steel mills are proposing equipment maintenance plans because steel demand has not picked up as expected after the Golden Week holiday. In addition, the strong rise in coke prices has kept steelmaking costs at a high level. Some mills are facing losses and therefore proactively reducing production loads.

Iron ore spot trading prices are relatively firm. Inventory at Tangshan Port has seen some shortages, while inventory of mainstream ores is still at a low level. This has led to relatively strong spot transaction prices at the port.

SGX iron ore futures also eased losses on Tuesday afternoon, even as steel mill production cuts and property market woes lowered market expectations. Bloomberg learned from sources that Beijing plans at least $137 billion of additional debt to unleash a new round of stimulus.