China's iron ore spot trading platform again reported zero transactions Monday, following four consecutive weeks of zero transactions. The platform was launched in May this year as a way to reduce speculation and improve transparency in pricing.
The total volume of iron ore offered on the platform has also dropped to 814,000 tons in the past week, down from 2.61 million tons four weeks ago, according to data from Beijing International Mining Exchange (BIME), one of the sponsors of the platform.
"Iron ore sellers are not willing to cut prices, but buyers are expecting lower prices considering the sluggish market conditions," Wang Chunsheng, deputy secretary-general of the China Iron and Steel Association (CISA), told the Global Times Monday.
Wang further explained that steel demand in northern parts of China has been declining as the cold weather has dampened demand from the construction sector. But demand in the warmer southern regions is stronger, which may have contributed to the divided market expectations between sellers and buyers.
The trading platform operates mainly online, but "most steel companies and iron ore traders at present still rely mainly on offline trading," Wang Guoqing, a senior analyst at Beijing Lange Steel Information Research Center, told the Global Times Monday.
Wang noted that the offers on the platform are small compared with the iron ore consumption of most steel companies, another reason behind the sluggish transactions on the platform.
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