- Iron ore spot markets recorded back-to-back losses on Thursday.
- Chinese steel and iron ore futures weakened overnight, hinting the price downdraft may continue on Friday.
- Deutsche Bank sees the price of 62% fines trading between $60 to $70 a tonne this year.
Iron ore spot markets fell again on Thursday.
According to Metal Bulletin, the spot price for benchmark 62% fines slipped 0.5% to $64.47 a tonne, adding to the 0.8% decline seen on Wednesday.
58% fines fell 0.7% to $37.76.
Ore with 65% Fe content managed to buck the weakness closing flat at $81.70 a tonne.
The modest losses across mid-and-lower grades coincided with another steep reversal in Chinese iron ore and rebar futures on Thursday.
Rebar futures in Shanghai closed down 0.6% to 3,402 yuan a tonne. Iron ore futures traded separately in Dalian fell by a larger 0.9% to 450 yuan a tonne.
Both contracts recovered from steep losses earlier in the session.
However, that recovery was reversed again in overnight, continuing the choppy price action seen in recent days.
Here’s the final scoreboard.
SHFE Rebar ¥3,387 , -0.29%
DCE Iron Ore ¥446.50 , -0.33%
The modest declines suggest spot markets may follow suit on Friday. Trade will resume at 11am AEST.
“The steel price has been going up and down at the moment because we haven’t seen a very solid improvement in demand,” Richard Lu, an analyst at CRU consultancy, told Reuters.
After a steep decline in recent months, commodity researchers at Deutsche Bank believe iron ore looks set to range trade in the months ahead.
“The price story for iron ore is likely to be one of directional restraint over the course of this year,” Deutsche says.
“An expected re-tightening in China’s steel market in Q2, mill restocking of ore and short covering risks all point to limited downside from here. However, a softening in the seaborne balance on moderating demand dynamic limit the potential support for a sharp rebound.
“We expect iron ore prices to trade between $60-70 a tonne this year.”