- Iron ore spot markets fell on Wednesday after strong gains in the previous two sessions.
- The losses coincided with a reversal in Chinese steel futures.
- Both iron ore and rebar futures rose modestly in overnight trade, continuing the choppy price action seen in recent days.
Iron ore spot markets weakened on Wednesday, mirroring a reversal in Chinese steel prices seen during the session.
According to Metal Bulletin, the price for benchmark 62% fines slipped 0.8% to $64.79 a tonne, losing around a third of the gain achieved a day earlier.
The performance of the benchmark was mirrored across the grades.
Ore with 65% Fe content fell 1.2% to $81.70 a tonne, double the 0.6% slide in 58% fines which settled at $38.01 a tonne.
The losses followed a large reversal in Chinese steel futures during the session, unwinding most of the gains seen on Tuesday.
Rebar futures in Shanghai finished down 0.7% to 3,395 yuan a tonne, well of Tuesday’s night session close of 3,451 yuan a tonne.
The weakness in rebar prices flowed through to iron ore futures in Dalian which fell heavily after hitting a one-week high in early trade.
The September 2018 contract closed down 0.7% at 447.5 yuan a tonne, well off the high of 461 yuan a tonne set earlier in the session.
“Steel and iron ore futures in China were under pressure after comments from the China Iron and Steel Industry Association Vice Secretary General Wang Yingsheng that the Chinese steel industry could be significantly hit if US-China trade dispute turns into a fully-fledged trade war,” said analysts at ANZ Bank.
However, keeping with the choppy price action in futures markets in recent days, those moves were partially reversed in overnight trade.
Here’s the final scoreboard.
SHFE Rebar ¥3,417 , -0.12%
DCE Iron Ore ¥452.00 , -0.44%
The modest gains suggest spot markets may start off firmer on Thursday. That comes with the disclaimer that futures indicated the same thing on Tuesday evening only to be proven wrong.
Trade in Chinese commodity futures will resume at 11am AEST.
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