Seaborne iron ore prices fell back on Tuesday after their record-breaking gain on Monday. Import volumes are now up year-on-year but were still relatively low in February, suggesting prices are not yet ready to fall at the pace they have risen.

The Kallanish index for 62% Fe Australian fines lowered by $3.23 to $59.46/dry metric ton cfr Qingdao. Three more trades took place on globalORE on Tuesday. 170,000t of PB fines sold for $64/t for April delivery, $1/t less than the final deal on Monday. Another 170,000t of PB fines traded at a $2.50/t premium to the Platts 62% Iodex. A further 180,000t of Standard Sinter Feed Guaiba went for a $3.50/t premium to a combination of the Metal Bulletin and MySteel 62% indices.

Coking coal meanwhile was continuing to piggyback on iron ore’s dramatic increase. 50,000t of hard coking coal traded on globalCOAL at $82.50/t fob Australia for April shipment on Tuesday, up from a similar deal at $81.30/t on Monday.

Iron ore supply overall is recovering only slowly, customs data show. China imported 73.61 million tonnes of iron ore in February, and although this was down -10.44% from January, it was still up 8.34% from a year earlier. Over January-February, imports are now up 6.4% y-o-y at 155.8mt.

With iron ore prices where they are now however, higher cost mining companies are likely considering making a few quick bucks before the market crashes again. Although demand from Chinese mills has grown significantly from the start of the year, they are still not producing at the peak levels seen in recent years.

BHP Billiton suggested that the spike in iron ore prices on Monday was largely due to mills locking in their forward prices, something which makes sense considering where steel futures are currently (see separate article). Without a sharp uptick in real steel demand, these prices are likely unsustainable.