For the second consecutive session the iron ore price has fallen, leaving the price down 6.2% from the 15-month peak of $70.46 a tonne struck on Thursday last week.
According to Metal Bulletin, the spot price for benchmark 62% fines fell 0.4%, or 26 cents, to $66.07 a tonne, building on the substantial 5.9% decline registered on Friday.
Year to date the price has still risen by an impressive 51.6%.
The fall coincided with news that members of the China Iron and Steel Association (CISA) continued to ramp up steel production in early April as higher steel prices encouraged mills to increase supply.
“CISA have announced that China’s daily crude steel output rebounded in early April, as mills stepped up production in line with rising steel prices,” said Metal Bulletin in its Monday note.
“Member mills produced crude steel at an average rate of 1.69 million tonnes per day during the first ten days of the month, up 3.4% from the last eleven days of March. As at April 10, CISA member mills had a combined finished steel inventory of 12.91 million tonnes, up 7% from March 31 levels, according to the association’s data.”
Following the introduction of higher margin requirements and increased trading fees late last week to curtail speculative forces, iron ore and rebar futures continued to soften in overnight trade, suggesting the weakness in the spot iron ore price may continue on Tuesday.
Iron ore futures on the Dalian Commodities Exchange fell 3.24% to 463.5 yuan, more than tripling the 0.94% decline registered in rebar futures on the separate Shanghai Futures Exchange.
Should those losses be sustained or built upon during Tuesday’s day session — beginning at 11am AEST — it will point to the likelihood of further losses in the spot iron ore price later on this evening.