- Iron ore spot prices fell heavily on Friday, continuing the choppy price action seen frequently in recent weeks.
- Chinese iron ore imports fell 5.5% in the first two months of the year compared to the same period a year earlier.
- Chinese steel and bulk commodity futures fell heavily on Friday evening, pointing to early weakness in physical markets on Monday.
Iron ore prices fell heavily on Friday, led by higher grades.
According to Metal Bulletin, the spot price for benchmark 62% fines slumped 2.1% to $85.77 a tonne, logging its largest percentage decline in a month.
The price for 65% Brazilian fines also slipped, falling 1.1% to $98.60 a tonne.
In contrast, the price for 58% fines edged higher, lifting to $68.88 a tonne, up 0.3% from Thursday.
News that Chinese iron ore imports fell to 174.4 million tonnes in January and February, down 5.5% on the same period a year earlier, may have contributed to the result, raising concern about Chinese demand amidst sharply higher prices, especially with port inventories continuing to build.
The weakness in spot markets came despite news that policymakers in Tangshan, China’s top steel-producing city, had indefinitely extended a level one smog alert, forcing mills to reduce output by 40% or more, according to Reuters.
That likely helped to support rebar and hot-rolled coil futures in Shanghai which finished the day session at 3,772 and 3,712 yuan, almost unchanged from Thursday’s night session close.
Iron ore futures in Dalian were also calm, easing two yuan to last trade at 613 yuan.
Coking coal and coke contracts, in contrast, came under pressure, falling from 1,255 and 2,037 yuan on Thursday evening to close at 1,233.5 and 2,023.5 yuan respectively.
However, despite the mixed price performance seen earlier in the day, all give contracts fell heavily in overnight trade on Friday.
SHFE Hot Rolled Coil ¥3,676 , -1.08%
SHFE Rebar ¥3,723 , -1.59%
DCE Iron Ore ¥604.50 , -1.95%
DCE Coking Coal ¥1,226.00 , -2.27%
DCE Coke ¥1,989.50 , -2.62%
The movement in futures points to early weakness in physical markets on Monday. Trade in futures will resume at midday AEDT.
Over the weekend, Chinese credit and new bank lending data for February undershot market expectations, something that may weigh on sentiment during the session.
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