DERAILED: Iron ore prices ease after surging earlier in the week

iStock
  • Iron ore spot markets fell across the board on Wednesday, partially reversing strong gains achieved earlier in the week.
  • The losses came despite a warning from BHP that iron ore exports from Port Hedland will likely be disrupted following a train derailment on its privately-owned rail line on Monday.
  • Chinese futures were quiet on Wednesday, including in the overnight session.

Iron ore spot markets fell across the board on Wednesday, partially reversing strong gains achieved earlier in the week.

According to Metal Bulletin, the price for benchmark 62% fines slipped 0.6% to $75.27 a tonne having surged 2.4% on Monday. Spot market pricing was not available on Tuesday due to a public holiday in Singapore.

Modest falls were also seen across lower and higher grades during the session.

58% fines eased by 0.2% to $45.32 a tonne. 65% Brazilian fines dipped by a slightly larger 0.3%, settling at $96.80 a tonne.

The losses came despite a warning from BHP that iron ore exports from Port Hedland will likely be disrupted following a train derailment on its privately-owned rail line on Monday.

The miner said iron ore inventories at Port Hedland hub were unlikely to cover the entire period of disruption following the incident, and that it would be liaising with its customers about its contractual commitments over that time, according to Reuters.

BHP has estimated it will take around one week to repair the line.

Nor were the losses in spot markets sparked by weakness in Chinese steel futures during the session — they were flat.

The January 2019 rebar contract finished trade at 3,930 yuan, just below the 3,936 yuan level it closed on Tuesday evening. Hot-rolled coil futures were also unchanged at 3,713 yuan.

Separately, iron ore, coking coal and coke contracts all inched higher, ending the session at 511, 1,361 and 2,395.5 yuan respectively, up from 508, 1,360.5 and 2,388 yuan on Tuesday evening.

As seen in the scoreboard below, all five contracts finished mixed in overnight trade on Wednesday.

SHFE Hot Rolled Coil ¥3,704 , -0.46%
SHFE Rebar ¥3,958 , 0.48%
DCE Iron Ore ¥512.00 , 0.59%
DCE Coking Coal ¥1,349.50 , -0.55%
DCE Coke ¥2,372.50 , -0.50%

The movements offer few clues as to what direction physical markets will move today.

Trade in Chinese commodity futures will resume at midday AEDT.

WATCH: The mangled wreckage of BHP’s runaway train which derailed in Western Australia

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.