Iron ore is back below $70 a tonne.
According to Metal Bulletin, the spot price for benchmark 62% fines tumbled 4.1% to $68.85 a tonne on Tuesday, extending its losses over the past four sessions to 10.1%.
It now sits at the lowest level since July 28.
The weakness in the benchmark was mirrored across both higher and lower grade ores. The price for 58% fines skidded 4.3% to $42.61 a tonne while ore with 65% Fe content fell by a smaller 2.5% to $93.50 a tonne.
The slide in spot markets followed yet another ugly reversal in Chinese futures earlier in the session, said analysts at Metal Bulletin.
“Rebar futures fell again during the day, which kept trading activity in the spot market at a minimum, which put pressure on prices,” the group wrote on Tuesday citing market sources.
“The selling interest is high with stockists coming under pressure from high inventory levels, which raised expectations of a further decline in prices over the rest of the week.”
Along with the weakness in Chinese steel markets, Vivek Dhar, mining and energy analyst at the Commonwealth Bank, said iron ore was also undermined by other factors during the session.
“Iron ore prices fell on demand concerns after some local governments in China reportedly issued directives to cut sintering output from now to March to next year. Cuts to sintering output reduce the demand for iron ore fines and increase the premium for iron ore lumps,” he said in a note released earlier this week.
“Prices also fell on reports that steel mills were prioritising repayments on loans due at the end of the September quarter over procuring iron ore.”
After finishing Tuesday’s day session at 3,740 yuan and 498 yuan per tonne respectively, Chinese rebar and iron ore futures stabilised in overnight trade, closing Tuesday’s night session flat to slightly higher.
Here’s the final scoreboard for Tuesday’s night session.
SHFE Rebar ¥3,765 , -0.63%
DCE Iron Ore ¥498.00 , -1.78%
DCE Coking Coal ¥1,289.00 , -0.39%
DCE Coke ¥2,165.50 , -1.37%
The limited movement suggests the steep declines in iron ore spot markets are unlikely to be repeated today, at least based on early indications.
Trade in Chinese commodity futures will resume at 11am AEST.