Iron ore markets weakened on Thursday amidst thin, holiday-impacted trade.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 1.3% to $US80.99 a tonne, leaving it at a one-week low.
The move in spot markets followed weakness in Chinese futures, with iron ore and rebar both trading lower during the session.
Market activity in steel markets was slow on Thursday, perhaps contributing to the declines.
“China’s spot rebar prices were stable on Thursday amid inactivity with many participants already out of the market for their Chinese New Year break,” Metal Bulletin said. “With the Chinese New Year just a week away, more participants have left the market for an early start to their holiday.
Volatility in futures markets also continued which, according to the group, limited activity levels across spot and physical markets.
Ahead of Chinese New Year celebrations that begin on January 28, Metal Bulletin says that market will likely slow even further next week.
Indeed, there are signs that’s already occurring with modest movements recorded in Chinese commodity futures overnight, an outcome that is now the exception rather than the norm.
Iron ore futures lost 0.24%, finishing trade at 631.5 yuan. Rebar and coking coal futures also logged modest moves, the former to the downside and the latter to the upside.
Trade in Chinese commodity futures will resume at Midday AEDT, an hour before the release of major Chinese economic data, including GDP.
If futures were to react, it will likely stem from steel production figures in the industrial output report, along with construction data which is a component of urban fixed asset investment.