SINGAPORE: Spot iron ore prices extended losses on Tuesday, with Chinese buyers still shunning the market waiting for further falls or a recovery in steel prices, but supply disruptions from Western Australia could limit the downside, traders said.
Indian ore with 63.5 percent iron content was quoted in China at $181-$183 a tonne, including freight, on Tuesday, down from $182-$184 on Monday, said Chinese consultancy Mysteel.
The 62 percent March iron ore futures on the Indian Commodity Exchange (ICEX) traded flat on Monday at 8,098 rupees per tonne.
Markets may see some support after Australian miner Fortescue Metals Group trimmed its March quarter production guidance to a range of 8.5-9.0 million tonnes, down 0.5 million tonnes, after heavy rains hit its mining operations in the Pilbara area of Western Australia.
Rio Tinto , which also mines iron ore in the region, said its operations had been impacted by adverse weather conditions during the first quarter, but that it will announce any impact in its quarterly report. Other smaller miners in the area may also have been affected, traders said.
"We have seen some slowing of shipments from the northern Pilbara due to the wet. It hasn't really shown up in China port stocks yet, but we could see some erosion from the current high levels," said a Sydney-based commodities trader.
Port stocks in China, above 80 million tonnes, are around record highs as Chinese consumer hold back from buying, hoping for prices to continue to fall and a pick up in steel demand.
The most active rebar contract for October delivery on the Shanghai Futures Exchange was slightly lower at 4,821 yuan per tonne by the midday break, after having slid to 4,770 yuan last week, its weakest since Dec. 1.
Key iron ore indexes, which global miners use in setting quarterly contract prices, extended losses on Monday.
Platts 62 percent iron ore benchmark fell $1 to $177 a tonne. It has lost 8.3 percent in the past 13 sessions since hitting a record high of $193 in mid-February.
The Steel Index's 62 percent gauge slipped $3.80 to $172.80 and Metal Bulletin's index dropped $1.86 to $174.97.
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