Iron ore spot prices were smoked on Wednesday, following the lead provided by Chinese futures earlier in the session.
According to Metal Bulletin, the spot price for benchmark 62% fines tumbled by 5.1% to $79.18 a tonne, it’s largest decline since November 30.
The decline left the year to date gain at 81.7%.
There were similarly enormous falls recorded in both lower and higher grade ores.
Analysts at Metal Bulletin put the decline down to renewed weakness in steel prices, something that tends to act as a lead indicator for iron ore prices at present, be it rightly or wrongly.
“China’s spot rebar prices retreated after drops in the futures and billet markets,” the group said.
“An increase in the supply of billet in Tangshan led to prices for the semi-finished steel product dropping late on Tuesday. Rebar futures followed suit on Wednesday, which resulted in buyers delaying their procurement plans.”
Suggesting that the selloff will continue on Thursday, Dalian iron ore futures closed the overnight session down 1.3% at 607.5 yuan.
Rebar futures traded on the Shanghai Futures Exchange also fell by 2.5% during the session.
Trade in Chinese futures will resume at Midday AEDT.