Continuing a trend seen since Chinese markets returned from the Golden Week holidays in early October, the iron ore price continued to tumble overnight, falling to the lowest level seen since late July.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 37 cents, or 0.69%, to $52.93 a tonne. From the recent peak of $56.61 a tonne set on October 12, the benchmark price has now fallen 6.5%, taking it to the lowest level seen since July 27.
Pointing to the possibility of further weakness in the spot price this evening, Chinese iron ore futures softened in overnight trade with the most actively traded January 2016 contract on the Dalian commodities exchange falling 0.4% to 370.5 yuan.
The weakness in the iron ore price follows news that global steel production continued to decline in the 12 months to September. According to the World Steel Association, 131 million tonnes of steel were produced, down 3.7% compared to September 2014. It marked the fifth straight month that global steel output had fallen.
China’s crude steel production, more than the rest of the world combined, was 66.1 million tonnes, a decrease of 3.0% on the levels of a year earlier.
Iron ore is a key ingredient in steel production.