Iron Ore Drops Below $90 a Ton as Supply Remains Abundant
Singapore iron ore futures fell 1.3% to $89.85 a ton, dropping below $90, as a new agreement was signed between a Chinese buyer and Rio Tinto.
Iron ore prices fell below $90 a ton, following a decline in futures contracts in Singapore and Dalian, as reported by CNN Brasil citing Reuters.
\nThe benchmark November iron ore contract in Singapore fell 1.3% to $89.85 a ton, while the January contract on the Dalian Commodity Exchange dropped 1.62% to 669 yuan a ton.
\nIn the same context, the state-owned China Mineral Resources Group (CMRG) notified steel mills of a new agreement with Rio Tinto, without providing additional details regarding its volume or duration.
\nAnalysts at Everbright Futures said that supply remains abundant despite a drop in domestic Chinese production, which explains the ongoing price pressure in the raw material market used in steelmaking.
\nWhat do these terms mean?
\nFutures contracts: Agreements to buy or sell a commodity at a specified price today, with delivery taking place at a later date.
\nIron ore: The raw material from which steel is made after being smelted in special furnaces.
\nDalian Commodity Exchange: A Chinese market for trading futures contracts for industrial and agricultural commodities, including iron ore.
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