- Iron ore spot markets fell for the third session in four on Wednesday.
- The losses came despite firmer Chinese steel prices.
- Chinese futures weakened in overnight trade, pointing to a soft start for spot markets on Thursday.
Iron ore spot markets continued to slide on Wednesday despite firmer Chinese steel prices.
According to Metal Bulletin, the price for benchmark 62% fines slipped 1.3% to $66.38 a tonne, it’s third decline in the past four sessions.
It has now lost 3% since hitting a one-month high of $68.45 on Thursday last week.
As is so often the case, weakness in the benchmark was replicated across the grades.
65% fines fell 0.7% to $84.70 a tonne, double the 0.3% drop seen in 58% fines which settled at $39.94 a tonne.
The losses came despite firmer steel futures in China which hit a seven-week high earlier in the session.
The October 2018 rebar contract in Shanghai closed at 3,573 yuan a tonne, an increase of 0.3%. It hit a high of 3,594 yuan a tonne earlier in the session, the loftiest level since March 9.
Analysts put the continued strength down to lower inventory levels, indicating that end-demand is picking up as is usually the case during the Spring construction season.
However, that wasn’t enough to lift iron ore futures in Dalian which fell heavily on Wednesday.
The September 2018 contract skidded 1.6% to 467.5 yuan a tonne, continuing to unwind after hitting a one-month peak on Monday. Coking coal and coke futures also softened during the session.
Hinting that the weakness in iron ore spot markets may extend into Thursday’s trading session, both rebar and iron ore futures both dipped modestly in overnight trade.
Here’s the final scoreboard.
SHFE Rebar ¥3,552 , -0.48%
DCE Iron Ore ¥464.50 , -1.28%
While small, the movements seen overnight suggest spot markets may follow suit today, at least in early trades.
Chinese commodity futures will reopen at 11am AEST.
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