Chinese iron ore futures were hammered on Friday evening, indicating that the relative calm in spot markets won’t persist on Monday.
According to the Dalian Commodities Exchange, the May 2017 iron ore futures contract closed at 580 yuan, down 3.89% for the session.
It now sits at the lowest level since December 5.
Some speculated that the weak physical demand at Chinese ports may have led futures markets lower.
“We’re just hearing on the physical side that buying appetite for iron ore has waned at the ports,” Kelly Teoh, an iron ore derivatives broker at Clarksons Platou Futures told Reuters.
“I think the steel mills are just holding off on buying at the moment.”
Rebar and coking coal futures also fell, although the gains were significantly smaller.
The acute weakness, seemingly, is concentrated only in iron ore on this occasion.
The enormous losses in futures markets followed one of the most minuscule moves in spot markets seen in many years.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by a solitary cent to $81.49 a tonne, leaving its gain in 2016 at 87%.
Not exactly exciting, but that looks set to change if futures are anything to go by.
Trade in Chinese commodity futures will resume at Midday AEDT.
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