Iron ore spot markets remain choppy and largely directionless, continuing the pattern seen throughout the month of October.
According to Metal Bulletin, the price for benchmark 62% fines fell by 0.7% to $62 a tonne, remaining firmly in the $59 to $63 range seen over the past three weeks.
Lower grades were hit harder than the benchmark with the price for 58% fines sliding 1.4% a tonne.
Higher grades were the relative outperformer with ore with 65% Fe content falling by 0.6% to $84.90 a tonne.
The modest declines followed another wild ride in Chinese iron ore futures, surging higher at the start of trade before gradually giving back ground as the session progressed.
The January 2018 iron ore contract in Dalian eventually closed up 1.21% at 458.5 yuan, well of the highs of 466.5 yuan struck earlier in the session.
This 5-minute chart shows the wild price swings seen over the past five days, including those seen yesterday on the far right. The chart comes courtesy of Thomson Reuters.
The gains in iron ore futures mirrored those in rebar futures in Shanghai which also gained for the session, adding 0.57% to 3,700 yuan.
After being dominated by demand concerns over looming steel production cuts in China that will be fully enforced by mid-November, the recent swings in iron ore have been more aligned with those in steel markets, hinting that steel mill profitability is once again a short-term driver of price movements.
“Restocking demand will likely be limited as steel output cuts in northern China continue to dampen the demand outlook for iron ore,” said Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank.
Offering few clues as to what direction spot markets will move today, Chinese futures edged higher in unusually quiet overnight trade.
Iron ore futures in Dalian closed at 459.5 yuan while rebar futures in Shanghai closed at 3,737 yuan.
Although large movements compared to those in other asset classes, these are very small for those usually witnessed in these markets. Hence, little can be read into the price movements overnight.
Trade in futures will resume at midday AEDT.
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