Iron ore prices just keep on sliding.
Spot markets have weakened for four consecutive sessions, and with Chinese futures down heavily overnight, that could well extend to a fifth session on Wednesday.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by a further 0.44% to $74.38 a tonne, leaving it at the lowest level since November 30 last year.
It has now lost 8.8% over the past four sessions, extending its decline from late February to 21.6%.
Lower grade ores fared even worse for the session with the price for 58% fines sliding 2.14% to $47.93 a tonne, leaving it at lows not seen since October 27 last year.
Continuing a familiar theme, Metal Bulletin said that the decline corresponded with continued weakness in Chinese steel markets.
“China’s spot rebar prices dropped further on Tuesday on increased selling interest. Billet and rebar futures selling in the spot market increased as futures prices fell,” said the group.
“Market sentiment was bearish and spot rebar prices were expected to decrease further this week, according to market participants.”
And that’s been driven by a combination of higher prices and increased supply of both steel and iron ore, weighing on prices as a consequence.
“The trend is still for steel and iron ore to weaken in the coming weeks,” an unnamed trader at the Shanghai Futures Exchange told Reuters. “There is a lot of steel and iron ore being produced, too much.”
Chinese commodity futures continued to weaken in overnight trade, pointing to the likelihood that spot markets may continue to slide on Wednesday.
The most actively traded rebar, iron ore, coking coal and coke futures all closed the session nursing losses of 2% or more.
SHFE Rebar ¥2,963 , -3.14%
DCE Iron Ore ¥512.50 , -2.10%
DCE Coking Coal ¥1,212.00 , -2.10%
DCE Coke ¥1,693.50 , -3.56%
Trade in Chinese futures will resume at 11am AEST, half an hour before the release of Chinese consumer and producer price inflation figures for March at 11.30am AEST.