On Monday, as has been the case for much of the past two weeks, the spot iron ore price was hammered.
According to Metal Bulletin’s iron ore index the price for 62% fines fell 5.39%, or $2.98, to 52.28 a tonne.
Not only was it the second largest fall in percentage terms since May 30 last year – overshadowed only by last Thursday’s 6.03% – it took the index back to levels last seen on April 21 this year.
But we may not have seen the worst of the falls yet.
Overnight the September iron ore futures contract on the Dalian commodities exchange was smoked again, losing close to 5% to 380.5 yuan, taking the contract price back to levels seen in mid-April this year.
If sustained during today’s day session, there is a very real prospect the spot price will tumble below the $50 a tonne level this evening.
Record seaborne exports from Australia’s largest iron ore port in June, Port Hedland, and deteriorating conditions across China’s steel-making sector, appear to be acting in tandem to smash the spot price lower at present.
It now appears likely the spot price will test its record-low level of $47.08 struck in April based on the acceleration in losses seen in recent days.