Iron ore is back below $60 a tonne for the first time since late June, falling heavily for a second consecutive session on Wednesday.
According to Metal Bulletin, the spot price for benchmark 62% fines slid 2.2% to $59.65 a tonne, extending its losses over the past two sessions to 4.8%.
It was also the first time since June 27 that the benchmark price closed below the $60 a tonne level.
Both lower and higher grades also fell heavily during the session, although the latter continued to outperform the former.
The price for 58% fines tumbled 2.7% to 35.98 a tonne, while ore with 65% Fe content lost a smaller 1.5%, finishing trade at $85.20 a tonne.
The sharp slide in spot markets coincided with continued weakness in rebar futures in Shanghai which slowly gave up earlier gains over the course of Wednesday’s session, eventually closing at the lowest level since late July.
Analysts put that slide down to concern about growing steel inventory levels following a week-long holiday in China last week.
The weakness in rebar markets did little to help iron ore futures in Dalian which were already under pressure due to ongoing concerns surrounding the outlook for demand.
“Steel mills took a cautious attitude towards purchasing iron ore considering production cut measures taken by the central government recently,” said analysts at The Steel Index.
Steel production cuts are due to begin in China from mid-November in an attempt to improve air quality during winter months.
“Iron ore prices sank as traders become increasingly concerned about the impact of closing steel mills over the upcoming National Congress in China,” said analysts at ANZ.
“Rising iron ore inventories also appears to be weighing on the market.
“Stockpiles at Chinese ports increased by 0.5% last week to 133.9 million tonnes, according to SteelHome, building on the previous week’s gain of 1.8%.”
Providing no clear indication as to whether the selling pressure will remain in place today, Chinese futures finished mixed in overnight trade.
Rebar futures in Shanghai finished at 3,559 yuan, up from the day session close of 3,523 yuan. Iron ore futures in Dalian went the other direction, finishing trade at 434.5 yuan, fractionally below Wednesday’s day session close of 436 yuan.
SHFE Rebar ¥3,559 , -0.22%
DCE Iron Ore ¥434.50 , -1.25%
DCE Coking Coal ¥1,116.00 , 1.41%
DCE Coke ¥1,801.00 , -0.80%
Trade in Chinese commodity futures will resume at midday AEDT.