Iron ore with 62-percent iron content fell 7.2 percent to $128.50 a tonne on Tuesday, according to Platts. It was the biggest percentage drop for the reference price index since Platts began publishing it in November 2008.
Iron ore‘s steepest ever price slide on Tuesday reflects slowing growth in top consumer China and casts more doubts on Beijing’s commodity demand at a time when the outlook for developed economies remains shaky.
Some mills in China have stopped buying iron ore as they curb steel output to cope with the downturn in demand. China buys around two thirds of seaborne cargoes to feed the world’s largest steel industry, and is the biggest market for the mining giants Vale (VALE5.SA), Rio Tinto Group (RIO.AX) (RIO.L) and BHP Billiton (BHP.AX) (BLT.L).
Weak steel demand across Asia cut profits at Japan’s two biggest steelmakers — Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T) — in the fiscal six months to September, and both slashed their full-year outlook.