Iron ore markets dipped on Tuesday following three days of strong gains.
According to Metal Bulletin, the spot price for benchmark 62% fines fell 0.93% to $75.46 a tonne, pulling back from the more than four-month high of $76.17 a tonne struck on Monday.
The weakness in the benchmark was seen across other grades.
58% fines were whacked, slumping 3% to $50.11 a tonne. Higher grades fared better with ore with 65% Fe content falling by 0.7% to $90 a tonne.
Metal Bulletin said that a combination of weakness in Chinese rebar futures and a dearth of market activity contributed to the declines in spot markets.
“China’s spot rebar prices retreated slightly on Tuesday amid losses in the futures market and sparse trading,” the group said.
“Rebar futures fell sharply during the early trading hours before the contract recovered some losses in the afternoon, resulting in downward movements and little activity in the spot market.”
The weakness in futures coincided with the release of Chinese iron ore import and Port Hedland iron ore export data for July which both reported a steep decline in volumes from the levels of a month earlier.
The January 2018 rebar future on the Shanghai Futures Exchange finished the session down 0.6% at 3,884 yuan per tonne. The weakness flowed through to iron ore futures in Dalian which closed the session down 2.6% at 549 yuan per tonne.
However, in what is quickly becoming the norm rather than the exception, that decline was partially unwound overnight as rebar futures rebounded.
Here’s the final scorecard from the night session.
SHFE Rebar ¥3,909 , -0.20%
DCE Iron Ore ¥566.00 , 0.89%
DCE Coking Coal ¥1,327.00 , 3.79%
DCE Coke ¥2,120.00 , 2.19%
Both iron ore and rebar futures closed well off the lows struck during Tuesday’s day session.
Trade in Chinese commodity futures will resume at 11am AEST, 30 minutes before the release of Chinese consumer and producer price inflation figures for July.