Metal Bulletin cited,Spot iron ore prices continued to soften on reluctant Chinese buying in the face of mounting inventories and weak steel prices.

Prices narrowed to $137-138 per tonne cfr China for 63.5% Fe Indian fines, down from $137-138.5 cfr last Friday, as negative sentiment prevailed in the market.

There were reported transactions of Brazilian iron ore fines at $134 cfr for 62% Fe, and Australian iron ore fines at $121 cfr for 58.5% Fe, but transactions of Indian iron ore were scarce.

Iron ore prices are expected to fall for the rest of the week, as many Chinese steel mills are hardly breaking even with their huge stocks of unsold steel and given weak steel prices, said a Lianyungang-based trader.

Some traders said spot iron ore prices of $137-138 cfr still registered too much risk for them to handle.

Steel futures on the Shanghai Futures Exchange rebounded today, with benchmark October rebar ending 1.4% higher at 4,626 yuan ($677) per tonne.
 
But traders believe this would render little help to the spot iron ore market, given high steel stockpiles in the market.

A Shanghai-based trader said iron ore stockpiles at Chinese ports had grown to 70 million tonnes, allowing steel mills to postpone iron ore imports for at least another week.