Iron ore spot markets slipped on Tuesday, pausing for breath after a breakneck rally over the past week.
And with Chinese futures down overnight, it suggests the weakness may extend into a second session.
According to Metal Bulletin, the spot price for benchmark 62% fines fell 0.56% to $91.71 a tonne, marking the first decline in six trading sessions.
Despite the small decline, it has still added 16.3% year to date.
Lower grade ores also weakened with the price of 58% fines slipping by a larger 1.06% to $61.16 a tonne.
Analysts at Metal Bulletin said that the pullback occurred amidst a slowdown in steel market activity.
“China’s spot rebar prices stabilised today as trading activity thinned,” it said. “The market quietened down during the day after Monday’s round of active procurement by buyers.”
There was no evidence that proposed cutbacks to steel production from Chinese regulators — something that lit a fire under markets just a day earlier — was having the same impact on Tuesday.
Seemingly it came and went in a flash.
And, with market activity drying up after a flurry earlier in the week, it appears to be impacting sentiment among Chinese commodity futures traders.
Most contracts were weaker overnight.
The May 2017 iron ore contract slid 1.34% to 697.5 yuan, mirroring weakness in coking coal, coke and rebar futures which fell by 2.31%, 2.03% and 0.26% respectively.
Here’s the final scoreboard from overnight. Trade in Chinese commodity futures will resume at midday AEDT.
SHFE Copper ¥48,890 , -2.42%
SHFE Aluminium ¥14,350 , 0.60%
SHFE Zinc ¥23,580 , -1.32%
SHFE Nickel ¥89,390 , -0.10%
SHFE Rebar ¥3,410 , -0.26%
DCE Iron Ore ¥697.50 , -1.34%
DCE Coking Coal ¥1,185.00 , -2.31%
DCE Coke ¥1,637.00 , -2.03%