DCE iron ore contracts I1505, I1505, I1509 and I1510 all broke the support CNY 500 on November 18 and dropped 3.94%, 2.36%, 3.98% and 3.97% respectively from previous day’s settlement prices. With three of them reaching the daily limits.

Apart from possible impact in this very first day from cross border stock trading between Hong Kong and Shanghai stock markets, national pig iron output in early November is estimated at 1.7358 million tonnes per day, the lowest since early March, based on CISA's 10 day production report about its members during the same period of time. Although there are factors from production cutbacks during APEC conference (November 05/11), the slowing demand engine is working on iron ore prices.

Mr Wang Zhongyuan analyst of SteelHome believes that it is a sign indicating North Chinese steel mills' restocking intensity is falling.

Mr Wang said that “It also has something to do with falling restocking intensity in North China due to transportation difficulties in winter season. Temperature in Northeast China have already fell into -10 degree centigrade one week ago, the time when SteelHome’s iron ore port inventories ended five consecutive weeks of growth starting from September 26. No changes in China’s pig iron output were big enough to support such a long time of port stock drops and that means Chinese steel mills were restocking and now with transportation difficulties, they are consuming stocks.”

He added “Bulk Commodity Index, which is used to reflect freight of vessels shipping coal, iron ore and other bulk commodities, hiked 187.53% from 1,315 on October 16 to 3,781 on November 04 and then dropped 22.48% till 2,931 on November 14. It can be seen as an evidence of changes in iron ore shipment volumes.”