After most products finished “limit down” on Monday, the maximum decline allowed in any one trading session, Chinese commodity futures have been pummeled yet again on Tuesday.
At the mid-session break, the September 2016 Chinese iron ore futures on the Dalian Commodities Exchange (DCE) sits down 4.83% at 384 yuan, leaving it trading at the lowest level since April 11.
Earlier in the session it fell to as low as 379.5 yuan, leaving it limit down for the session.
Over the past 10 sessions alone it has lost 23.5% in value.
On Monday, the spot price for benchmark 62% iron ore fines fell by 5.7%, or $3.30, to $54.99 a tonne, leaving the price down by a similar margin.
The catalyst behind the enormous decline was an announcement from the DCE on Monday that it would continue to strengthen its market monitoring, suggesting that it may raise transaction fees further to curb speculation risks.
The losses in iron ore futures are being mirrored in other bulk commodity contracts across China.
Coking coal futures are on the DCE currently sit down 4.64% while rebar futures on the separate Shanghai Futures Exchange are lower by 5.32%.
Like iron ore, both contracts had earlier fallen by their maximum daily amount.
Perhaps the late rebound signals that the worst of the declines are now over, or maybe not. We’ll find out when trade ceases in all three contracts at 5pm AEST.
Mining stock have been obliterated today. Currently the ASX 200 materials index is down 3%.
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