Iron ore prices take a hit

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  • Iron ore spot markets fell heavily on Wednesday.
  • Lower grades took the biggest hit, continuing to ease back from multi-year highs struck last week.
  • Chinese steel and iron ore futures rose in overnight trade on Wednesday, pointing to a firmer start in physical markets today.

Iron ore prices fell heavily across the board on Wednesday.

According to Metal Bulletin, the spot price for benchmark 62% fines slipped 1.4% to $88 a tonne, logging its largest decline in a week.

58% fines was hit even harder than the benchmark, slumping 1.6% to $68.61 a tonne. It has now fallen in five of the past six sessions, moving further away from the multi-year high of $70.38 struck last week.

65% fines also weakened during the session, easing 0.4% to settle at $100.20 a tonne.

The weakness in spot markets followed similar moves in Chinese steel and iron ore futures on Tuesday evening.

After closing the prior night session at 3,639 and 3,631 yuan respectively, rebar and hot-rolled coil futures in Shanghai finished flat to higher on Wednesday, ending the session at 3,641 and 3,657 yuan.

Iron ore futures went in the other direction, ending trade at 619.5 yuan, down from 624.5 yuan on Tuesday evening.

In contrast, coking coal and coke contracts surged, a move that continued in overnight trade on Wednesday.

SHFE Hot Rolled Coil ¥3,673 , 1.32%
SHFE Rebar ¥3,679 , 1.66%
DCE Iron Ore ¥624.00 , 0.40%
DCE Coking Coal ¥1,285.50 , 2.10%
DCE Coke ¥2,138.00 , 2.22%

Steel and iron ore contracts also straightened during the session, pointing to the likelihood of firmer prices in physical markets in early deals on Thursday.

Trade in Chinese commodity futures will resume at midday AEDT.

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