The iron ore price fell heavily overnight, snapping a four-day winning streak in the process.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 2.73%, or $1.17, to $41.61 a tonne.
The decline, the largest in percentage terms since January 13, left the year-to-date decline at 4.5%.
Demonstrating the huge uplift in seaborne iron ore supply hitting the market at present, Metal Bulletin note that the decline coincides with recent production figures from Australia’s two largest iron ore miners, Rio Tinto and BHP Billiton.
“Rio Tinto’s sales and output were up 11% year-on-year in Q4 2015, taking its 2015 totals to all-time highs of 337 million tonnes and 328 million tonnes for shipments and output respectively,” wrote Metal Bulletin in a research note released overnight.
“Meanwhile BHP Billiton also had a strong fourth quarter of 2015, with output up 5% to 64.2 million tonnes compared with 61.4 million tonnes a year earlier.”
Even with slowing iron ore production in China, tepid demand and the huge rise in seaborne supply continues to place downward pressure on prices at present.
Indicating that further weakness may arrive in the spot price this evening, Dalian iron ore futures continued to slide overnight.
The most actively traded May 2016 contract fell by 1.26% to 313.5 yuan. Rebar futures were also lower with the May 2016 contract on the Shanghai Futures Exchange slipping 0.88% to 1,810 yuan.
Trade in both will resume at 12pm AEDT today.