Iron ore’s stay above $70 didn’t last long, falling heavily on Thursday as Chinese steel markets softened.
According to Metal Bulletin, the spot price for benchmark 62% fines fell 3.12% to $68.05 a tonne, trimming its gain for the week to 3.51%.
The fall in the benchmark was replicated across the board with the steepest declines seen in lower grades.
58% fines tumbled 3.77% to $46.98. Ore with 65% Fe content fared better, losing only 1.28% to close at $84.50.
Metal Bulletin said the move followed renewed weakness in Chinese steel markets, sparked by a plunge in rebar futures during the session.
“China’s spot rebar prices fell on Thursday following a dive in futures amid sparse trading,” the group said. “Combined with worsening weather conditions in major markets it kept trading activity thin”.
Rebar futures in Shanghai closed down 4.11% at 3,496 yuan, while Dalian iron ore skidded 1.9% to 517 yuan. Earlier in the session the September 2017 iron ore contract hit a high of 536.5 yuan, the highest level since May 2.
And that form continued overnight with both rebar and iron ore futures adding to their day session losses.
Here’s the final scoreboard.
SHFE Rebar ¥3,492 , -2.51%
DCE Iron Ore ¥509.50 , -3.04%
DCE Coking Coal ¥1,216.50 , -2.91%
DCE Coke ¥1,896.50 , -1.84%
The weakness suggests that another pullback in iron ore spot markets may arrive today, although a lot will be determined by the performance of futures during the session.
Trade in Chinese commodity futures will resume at 11am AEST.