Reuters reported that sellers of foreign iron ore cargoes to China slashed prices further on Monday as the benchmark rate dropped to its lowest in more than 2 and 1/2 years, with losses likely to deepen further as weak steel demand forces mills to cut output.

Iron ore has fallen 24% from this year's peak near $150 in April as demand from the world's top consumer sagged along with its economy.

Chinese data last week, including a much smaller-than-forecast growth in exports due to a faltering European economy, suggested the slowdown in the world's No. 2 economy could well extend into the third quarter.

Price offers for imported iron ore cargoes in China fell by USD 1 to USD 2 per tonne on Monday, according to Beijing-based consultancy Umetal, as buying interest remained thin. That could further set back prices this week. Benchmark iron ore with 62% iron content .IO62-CNI=SI fell nearly 1% to USD 113.80 a tonne on Friday, its cheapest since December 29, 2009, based on data from Steel Index.

A Shanghai based iron ore trader said that "We don't know where the bottom is, but a lot of people believe $105 is a technical possibility.” He said that "If there's iron ore buying it's primarily because steel mills need to refill stocks. Otherwise they have little interest."

A weak steel market had been curbing China's demand for iron ore, with prices down 15% from this year's peak, also reached in April. Shanghai's most-traded January rebar futures fell 1% to close at CNY 3,683 (USD 580) a tonne.

Source - Thomson Reuters

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