After a modest bounce on Tuesday, the slide in the iron ore price intensified overnight with the price for benchmark ore slipping below the $50 a tonne level for the first time since early July.
According to Metal Bulletin, the spot price for benchmark 62% fines slid by $1.55, or 3%, to $49.95 a tonne. From October 12 the price has now fallen 11.8%, taking this year’s total decline to 30%.
It now sits only $5.36 away from the all-time record low for the spot price set on July 8 this year.
According to Kofi Mensa and Vivek Dhar, commodity analysts at CBA, the renewed weakness was likely due to concerns over Chinese steel demand following comments from the deputy head of the China Iron and Steel Association (CISA) yesterday.
“Iron ore fell by 3.0% to $49.95/t on surplus concerns after the deputy head of the China Iron and Steel Association (CISA) said that China’s steel demand was contracting at an unprecedented rate due to the slowdown in the Chinese economy,” they wrote in a research note received this morning.
“Rising seaborne iron ore supply, particularly from Australia, also helped push iron ore prices lower.”
In an indication that further weakness in the spot price may arrive this evening, Chinese iron ore futures continued to tumble overnight with the most actively traded January 2016 contract on the Dalian Commodities Exchange falling 0.97% to 357.5 yuan.
Trade in Dalian will resume at 12pm AEDT.