The iron ore price tumbled for a second consecutive session on Wednesday.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 5.24%, to $3.32, to $60.09 a tonne, leaving it down 9.3% since Friday.
Metal Bulletin put the significant decline down to weakness in Chinese steel prices.
It continues the pattern of wild daily swings seen in recent weeks.
In 10 of the past 12 sessions the price has closed more than 3% above or below the previous day’s closing level. In the last four days alone, each session has yielded a move of more than 4% — two to the upside and two to the downside.
Crazy price action, and one that demonstrates that speculative forces in Chinese iron ore futures trading have clearly infiltrated the spot market.
Given the relationship between futures and the physical iron ore market of late, it looks like the weakness in the spot price may continue on Thursday.
Iron ore futures fell by 1.26%, outpacing a decline of 1% in rebar — something of a lead indicator for iron ore prices in recent months.