Iron ore prices continue to tumble, slumping to a fresh multi-month low on Monday.
According to Metal Bulletin, the spot price for benchmark 62% fines slumped by a further 3.53% to $66.25 a tonne, leaving it sitting at the lowest level since November 4 last year.
It has now lost 18.8% in the past seven trading sessions, extending its decline from the multi-year high of $94.86 a tonne struck on February 21 to 30.2%.
Prices for higher and lower grade ores also came under significant selling pressure during the session, corresponding with news that China produced a record amount of steel in March, further fanning concerns over a potential supply glut forming as construction activity slows in the months ahead.
China’s statistics bureau said that crude steel output grew by 1.8% to 72 million tonnes in March, more than a million tonnes more than the previous record high of 70.653 million tonnes set one year earlier.
The record-breaking monthly output followed news that Chinese iron ore imports rose to 95.56 million tonnes in March, the second largest monthly total on record.
Over the year, that left imports at 1.054 billion tonnes, the largest 12-month total on record. It was also 8.9% higher than the total imported in the 12 months to March 2016.
The voracious appetite for iron ore has contributed to Chinese port inventories ballooning to 131.35 million tonnes, according to data provided by Shanghai Steelhome, just shy of the all-time record peak of 132.45 million tonnes seen in late March.
Despite a 9.2% year-on-year increase in urban fixed-asset investment in the first three months of the year, suggesting that demand for steel remains firm, it weighed on spot and futures markets on Monday, dragging iron ore prices lower as a consequence.
And that theme continued overnight in futures markets, suggesting that the selling pressure in spot markets may continue on Tuesday.
The most actively traded September 2017 iron ore future on the Dalian Commodities Exchange slumped by a further 2.5% to 488 yuan, leaving it at the lowest level since January 3 this year.
Rebar futures traded separately on the Shanghai Futures Exchange also weakened, falling 1.04% to 2,959 yuan.
SHFE Rebar ¥2,959 , -1.04%
DCE Iron Ore ¥488.00 , -2.50%
DCE Coking Coal ¥1,133.00 , 0.35%
DCE Coke ¥1,658.50 , 0.97%
Trade in Chinese commodity futures will resume at 11am AEST.