- Iron ore spot and futures markets remain under pressure as steel prices continue to fall.
- The benchmark price for benchmark 62% fines has fallen 7% in the past five days.
- Chinese steel and iron ore futures were largely unchanged in overnight trade.
Iron ore markets remain under pressure, sliding again on Wednesday.
According to Metal Bulletin, the spot price for benchmark 62% fines slipped 0.5% to $64.11 a tonne, leaving it at the lowest level since April 16.
It has now fallen in each of the past five sessions, losing 7% in the process.
Across the grades, the price performance was mixed.
The price of 65% fines fell 0.7% to $82.80 a tonne. Meanwhile, 58% fines managed to buck the trend, lifting 0.5% to $38.04 a tonne.
The mixed price performance, and perhaps explaining the modest bid in lower grades, followed another steep decline in Chinese steel futures earlier in the day.
Rebar futures in Shanghai fell to as low as 3,511 yuan at one point, the lowest level since April. It eventually closed Wednesday’s day session at 3,531 yuan a tonne.
The weakness in steel markets flowed through to iron ore futures in Dalian which spent most of the session deep in the red before staging a later recovery into the close.
The September 2018 iron ore contract finished trade at 456.5 yuan.
China’s National Development Reform Commission (NDRC) announced on Monday that it would send inspection teams to carry out overcapacity check at steel mills in 21 regions, including the key steelmaking provinces of Hebei, Jiangsu and Shandong, potentially limiting steel production, and crimping demand for raw materials, during this period.
The checks are expected to run between May 22 to June 15.
“Surprise check may affect production, but in general, steel output will remain at a high level. With demand getting tepid…steel prices would be on a declining trend,” analysts at Orient Futures said in a note seen by Reuters.
Providing few clues as to whether the weakness in spot markets will continue today, Chinese futures finished largely unchanged overnight from Wednesday’s day session close.
Here’s the final scoreboard.
SHFE Rebar ¥3,526 , -0.42%
DCE Iron Ore ¥457.00 , 0.55%
Trade in all Chinese commodity futures will resume at 11am AEST.
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