Iron ore is looking weak

Photo by Phil Walter/Getty Images

Iron ore prices continue to slide.

According to Metal Bulletin, the spot price for benchmark 62% fines fell by a further 0.55% to $58.14 a tonne on Thursday, leaving it at the lowest level seen since July 26.

The benchmark price has now fallen for four consecutive sessions, losing 2.1% in the process. Not a great amount by any standard, although enough to see it break out of its recent trading range.

Year to date it has still gained 33.4%.

Suggesting that the weakness in spot markets may continue on Friday, Chinese iron ore futures continued to decline overnight. The most actively traded January 2016 contract on the Dalian Commodities Exchange finished at 405 yuan, down 0.37% for the session.

Analysts at Metal Bulletin note that the weakness in spot and futures prices corresponded with news that Chinese iron ore imports surged in August.

“China’s iron ore imports continued to grow in August, surging 18.4% on the year to the third-highest level recorded in a month,” the group wrote on Thursday.

“The world’s biggest buyer of the steelmaking raw material took in 87.72 million tonnes last month, compared with 74.1 million tonnes a year earlier. August’s volume is just shy of the 88.4 million tonnes recorded in July, the second-highest in history.”

There were also large declines recorded in coking coal and rebar futures, hinting that the recent price action has been driven by deteriorating sentiment towards the outlook for steel prices.

Trade in Chinese commodity futures will resume at 11am AEST.

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