SINGAPORE: Spot iron ore prices were on track for their second weekly loss out of three as Chinese steel mills limit their inventories of the raw material amid slower growth in steel demand in the world's biggest consumer.
Shanghai steel futures were headed for their worst week in two months after being sold off along with other commodities by investors wary about the prospects for the global economy following recent bleak data from the United States and China.
The recent commodities sell-off piled up the pressure on Chinese steel prices that are already battling tepid demand, prompting small and mid-sized steel producers to limit their stockpiles of iron ore.
"Demand (for iron ore) is still there but mills are only buying hand to mouth these days," said a shipping manager for a Shanghai-based iron ore trading firm.
"They have less inventories of raw materials because they have a huge inventory of steel products."
Benchmark 62-percent grade iron ore slipped half a percent to $138.60 a tonne on Thursday, the lowest since April 8, according to data provider Steel Index. For the week so far, iron ore has lost 1.7 percent.
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