Iron ore spot markets remained under pressure on Thursday, particularly across lower grades which suffered yet another multi percentage point decline.
And with Chinese futures continuing to sag in overnight trade, it looks like that trend may continue today.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by a further 0.46% to $60.24 a tonne, extending its fall over the past three sessions to 4.66%.
As seen in the chart below, the benchmark price is now back near the lows seen earlier this month.
While the benchmark price continued to soften, lower grade ores were slammed with the price for 58% fines slumping 2.57% to $38.99 a tonne.
It has tumbled 8.4% over the past few days.
Metal Bulletin said the weakness mirrored that in Chinese steel markets.
“China’s spot rebar traders lowered their prices on Thursday in an attempt to secure more sales ahead of a holiday in the country,” the group said.
“With the market set to take a break from the weekend until Tuesday for the Dragon Boat Festival, traders tried to get a bigger piece of the pre-holiday restocking pie by lowering their prices.”
Suggesting that weakness in spot markets may continue today, Chinese commodity futures remained under pressure in overnight trade.
The September 2017 iron ore future on the Dalian Commodities Exchange fell 1.31% to 451 yuan, outpacing a drop of 0.95% in rebar futures traded on the Shanghai Futures Exchange.
That points to another day of weakness, and the potential for the benchmark iron ore prices to fall below the $60 a tonne level for the first time since October last year.
Trade in Chinese commodity futures will resume at 11am AEST.