Join

Enter Details

Comment on stories, receive email newsletters & alerts.

@
This is your permanent identity for Business Insider Australia
Your email must be valid for account activation
Minimum of 8 standard keyboard characters

Subscribe

Email newsletters but will contain a brief summary of our top stories and news alerts.

Forgotten Password

Enter Details


Back to log in

Iron ore and coal futures are getting smoked, again

China Photos/Getty Images

It’s getting ugly for Chinese coal and iron ore futures.

They’ve been smoked upon the resumption of trade on Thursday, adding the losses seen during Wednesday’s night session.
Here’s the scoreboard as at 75 minutes into trade.

SHFE Rebar ¥3,599 , -1.23%
DCE Iron Ore ¥453.00 , -3.10%
DCE Coking Coal ¥1,130.50 , -3.21%
DCE Coke ¥1,909.50 , -4.36%

Not the best of starts, right?

The January 2018 iron ore contract in Dalian has fallen to the lowest level since mid-July, breaking below lows struck earlier this week.

Dalian Iron Ore Daily Chart – January 2018 Contract. Source: Thomson Reuters.

While that suggests an element of technical selling, Viveh Dhar, mining and energy commodities analyst at the Commonwealth Bank, says iron ore is getting pressured by continued concerns on the outlook for demand.

“Impending steel output cuts in China are weighing on the iron ore demand outlook,” he says. “Market participants also note that iron ore restocking demand will likely wane as steel production comes under pressure.”

Chinese authorities will soon implement curbs on Chinese steel production, driven by attempts to improve air quality in northern provinces during winter months.

As another major steel input, that likely explains the size of the selloff seen in Chinese coking coal and coke futures seen on Thursday, continuing the move seen in recent weeks.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.