Iron ore did very little on Thursday, rising fractionally after two days of heavy losses.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 0.27%, or 16 cents, to $60.25 a tonne.
Year to date it has risen 38.3%.
Although the spot price rose yesterday, fundamentals continue to suggest that risks are to the downside, rather than the upside, at present.
“China’s National Bureau of Statistics have released data showing the country’s run-of-mine (ROM) iron ore output arrived at 98.2 million tonnes in March. Volumes totalled 261.6 million tonnes in the first quarter, down 5.3% on the year,” said Metal Bulletin in a research note released on Thursday.
“The price rebound has led some domestic miners to restart operations its been reported. March’s ROM output equates to a production rate of 3.2 million tonnes per day, almost 19% higher than 2.7 million tonnes per day in the first two months of 2016, according to Steel First calculations.”
Whether due to that news or other factors, Chinese iron ore futures were thumped in overnight trade. The most actively traded September 2016 contract tumbled 3.66% to 407.5, leaving it at lows not seen since mid-April.
There were also significant declines registered in rebar (-2.04%) and coking coal futures (-6.45%).
All contracts will resume trade at 11am AEST. If the losses are sustained during early trading today, particularly in iron ore, pressure is likely to build on the spot price into week’s end.