Iron ore remains under pressure

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  • Iron ore markets finished mixed on Monday with lower grades posting solid gains while mid and higher grades fell.
  • Chinese rebar inventory held by traders fell last week while iron ore port inventories rose back towards record highs.
  • Chinese commodity futures were largely unchanged overnight, continuing the choppy price action seen in recent days.

Iron ore markets put in a mixed performance to start the week with lower grades posting solid gains while mid and higher grades fell.

According to Metal Bulletin, the spot price for benchmark 62% fines fell 0.1% to $63.89 a tonne, logging its seventh fall in the past eight sessions.

It now sits at the lowest level since April 6, losing 7.3% from May 14.

Like the benchmark, higher grades were also down smalls with 65% fines falling 0.5% to $83 a tonne.

However, while mid and higher grades remained under the pump, lower grades managed to buck the trend on Monday.

The price of 58% fines rose by 1% to $38.07 a tonne, clawing back some of the losses seen over the past two weeks.

The mixed performance from spot markets followed a topsy turvy session for steel and iron ore futures on Monday.

Rebar futures in Shanghai finished at 3,579 yuan a tonne, almost unchanged Friday’s night session close. It briefly hit a high of 3,626 yuan before giving back ground in late trade.

Iron ore futures traded separately in Dalian were also largely unchanged from Friday’s night session close, finishing trade at 453.5 yuan. However, unlike the performance from rebar futures, it managed to claw back earlier losses in latter parts of trade.

Perhaps contributing to the choppy price action seen on Monday, movements in Chinese steel and iron ore inventories last week presented a mixed picture on the outlook prices.

On one hand, rebar inventory held by traders continued to fall, dropping by a further 370,400 tonnes to 5.653 million tonnes, according to data from Steelhome consultancy.

In contrast, Steelhome reported that iron ore port inventories rose over the week, lifting by 1.6 million tonnes to 160.58 million tonnes.

Providing few clues as to what direction iron ore spot markets may travel today, Chinese futures closed Monday’s night session largely unchanged.

Here’s the final scoreboard.

SHFE Rebar ¥3,583 , -0.03%
DCE Iron Ore ¥455.50 , 0.33%
DCE Coking Coal ¥1,198.50 , 1.05%
DCE Coke ¥2,003.50 , 1.06%

Trade in Chinese commodity futures will resume at 11am AEST.

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