The iron ore price has gone down, up, down, up, down over the past five trading session. Unfortunately for those looking for a higher price, the gains have been minuscule while the losses have been enormous, leaving it down 11.2% over that period.
And now the $50 a tonne level is at risk of being breached.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by a further 1.85%, or 95 cents, to $50.41 a tonne, leaving it at the lowest level seen since February 29.
It has now fallen over $20 since April 21, trimming its year to data gain to 15.7%.
Australia’s budget forecasts of $55 a tonne (FOB) are already looking a fair distance away, even before the start of the fiscal year.
Suggesting that the weakness in the spot price may continue today, putting a sub-$50 figure in play, Chinese iron ore futures continued to tumble in overnight trade, closing the session down 2.3%.
From the high of 493.5 yuan struck on April 25, the most actively traded September 2016 iron ore future has fallen by over 31%, suggesting not only that movements in futures are highly influential on spot pricing at present but also that speculative elements within the market are slowly being eradicated following a crackdown by regulators last month.
If sustained during Thursday’s day session, beginning at 11am AEST, it points to the likelihood of a further decline in the spot price today.