Iron ore’s winning streak has come to an end with spot markets following futures lower on Tuesday.
And with further profit-taking in Chinese iron ore and rebar futures overnight, the early indications suggest that spot markets may soften again on Wednesday.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 1.3% to $71.77 a tonne, logging its largest percentage decline in two weeks.
The benchmark had rallied hard in each of the past five sessions, and in eight of the past nine, adding an impressive 24.2% since the end of October.
Losses were also recorded across both lower and higher grades on Tuesday.
The price for 58% fines fell 0.8% to $41.05 a tonne while ore with 65% Fe content skidded 1.2% to $88.30 a tonne.
The losses in spot markets followed a large reversal in Chinese rebar and iron ore futures, pulling back sharply after hitting multi-month highs earlier in the session.
Rebar futures in Shanghai closed down 0.4% at 4,025 yuan, falling heavily after hitting a three-month high of 4,085 in early trade. It had surged more than 22% since early October, perhaps prompting some profit-taking among investors.
The weakness in rebar contracts led to a steep reversal in iron ore futures during the session. The May 2018 contract in Dalian closed down 0.5% at 539.5 yuan, falling heavily after climbing to a near three-month peak of 553 yuan earlier in the day.
And as can be seen in the scoreboards below, those moves continued in overnight trade, especially for rebar contracts.
SHFE Rebar ¥3,973 , -1.93%
DCE Iron Ore ¥538.50 , -1.19%
DCE Coking Coal ¥1,364.50 , -0.98%
DCE Coke ¥2,194.50 , -0.75%
Trade in Chinese commodity futures will resume at midday AEDT.
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