Iron ore spot markets continued to weaken on Monday, continuing the choppy price action that has become a feature of recent trade.
According to Metal Bulletin, the spot price for benchmark 62% fines slid by a further 0.92% to $91.49 per tonne, moving further away from the two-week high of $92.61 per tonne struck on Thursday.
Lower grade ores also fell with the price for 58% fines falling by a smaller 0.85% to $63.27 per tonne.
The declines came despite renewed strength in Chinese steel markets, said Metal Bulletin.
“China’s spot rebar prices rose on Monday amid gains in the billet market as well as several mills’ upward prices adjustments for their long products,” the group said.
“Active trading led to a rise in billet prices over the past weekend, and the upward momentum was sustained during the day, which improved sentiment among rebar sellers.”
The divergence between the two is slightly unusual given strength in steel markets late last year was widely cited as one of the factors that drove iron ore prices higher.
Whatever the explanation, Metal Bulletin expects the volatility in spot iron ore markets to persist for some time yet.
“Recently volatility across the iron ore market looks set to persist as no definitive trend has materialised in recent weeks,” it said.
In overnight trade, Dalian iron ore futures continued to weaken, pointing to the likelihood of early weakness in spot markets.
The May 2017 contract fell 2.03% to 701.5 yuan, closing below the day session closing level of 711.5 yuan per tonne.
Rebar futures traded separately on the Shanghai Futures Exchange fell by a smaller margin, while coke and coking coal futures rose modestly.
Here’s how both bulk and base commodity futures in China closed the overnight session.
SHFE Copper ¥47,800 , -0.54%
SHFE Aluminium ¥13,795 , -0.11%
SHFE Zinc ¥23,620 , -0.30%
SHFE Nickel ¥84,550 , -0.45%
SHFE Rebar ¥3,570 , -0.81%
DCE Iron Ore ¥701.50 , -2.03%
DCE Coking Coal ¥1,304.00 , 0.62%
DCE Coke ¥1,900.00 , 0.48%
Trade in all contracts will resume at midday AEDT.