Physical iron ore trading was limited on Monday, with participants from top importer China away for a public holiday, but traders expect spot prices to resume their decline when the Chinese markets reopen on Wednesday.
"I imagine that buyers are waiting until everybody's back on Wednesday before doing anything," said Rory MacDonald, broker at Freight Investor Services, adding there was limited interest in both the physical and swaps markets.
Iron ore with 62 percent iron content .IO62-CNI=SI, regarded as the industry benchmark, rose 1.1 percent to $145.40 a tonne on Friday, according to Steel Index.
Despite the gain, the price of the steel making ingredient still ended 2 percent lower for all of last week, having fallen to near seven-week troughs of $143.80 on Thursday.
Sluggish steel demand in China, the world's biggest consumer and producer, as evidenced by a slow drawdown in steel product inventories held by traders, had weighed on producers' demand for iron ore.
"I feel that prices will continue to come off and the two-day holiday in China is just a break in the market before we continue edging down," MacDonald said.
"We're not yet quite in that peak seasonal demand period, which some participants are sighting as a reason to expect a bounce post-holiday, in preparation for improved steel demand come late May."
Global and Chinese steel consumption growth will slow in 2012 because of weaker economic growth in China and uncertainties about the debt crisis in the euro zone, the World Steel Association said on Friday.
Global steel consumption will grow by 3.6 percent to 1.422 billion tonnes in 2012 and by 4.5 percent to 1.486 billion tonnes in 2013, against 5.6 percent growth last year, the association said.
Source: Reuters