Iron ore spot markets continued to slide on Tuesday, falling to a two-week low.
And with futures continuing to tumble overnight, the early signs point to further losses on Wednesday.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 1% to $76.36 a tonne, leaving it at the lowest level since August 17.
The weakness in the benchmark was reflected across both higher and lower grades on Tuesday.
58% fines slid by 2.2% to $48.97 a tonne while ore with 65% Fe content lost 1.1% to $100.10 a tonne.
The losses followed steep declines in iron ore futures earlier in the session.
The most actively traded January 2018 iron ore contract on the Dalian Commodities Exchange finished Tuesday’s day session at 5.54 yuan, down 2.72% from Monday’s day session close.
There were also steep declines reported in coke and coking coal futures which tumbled 2.49% and 4.72% respectively.
However, rebar futures on the Shanghai Futures Exchange managed to buck the trend, finishing flat after falling modestly in early trade. The rebound came despite news that Chinese rebar inventories inched higher to 3.88 million tonnes last week, according to data from Steelhome Consultancy.
“Investors are taking a cautious stance as they think steel prices have gone a bit too high,” Liu Xinwei, an analyst at China Sublime Information Group, told Reuters.
However, despite the resilient performance from rebar futures during Tuesday’s day session, they too came under selling pressure overnight, coinciding with further weakness in iron ore and coking coal futures.
Rebar futures closed the night session at 3,851 yuan per tonne, below the 3,882 level it finished Tuesday’s day session.
SHFE Rebar ¥3,851 , -1.26%
DCE Iron Ore ¥546.50 , -2.93%
DCE Coking Coal ¥1,371.00 , -4.86%
DCE Coke ¥2,371.50 , -2.61%
Iron ore, coking coal and coke futures also added to their day session losses, pointing to the likelihood that iron ore spot markets may continue to weaken on Wednesday.
Trade in Chinese commodity futures will resume at 11am AEST.