Iron ore resumed its slide on Thursday, falling close to 1%.
According to Metal Bulletin, the spot price for benchmark 62% fines fell by 0.94% to $55.05 a tonne, leaving the price near the multi-week low of $54.99 struck earlier in the week.
Analysts at Metal Bulletin note that the decline corresponded with a slowdown in transaction volumes.
Suggesting that the spot price may slide again on Friday, and by some margin, Chinese iron ore, coking coal and rebar futures were hammered in overnight trade, with all contracts falling by more than 4%.
Earlier this week the Dalian Commodities Exchange (DCE) announced that it would implement trading limits on individual commodity futures from Wednesday, telling investors that it will set a maximum open interest limit for the trading of a single contract in a certain period, excluding trading for hedging purposes.
“The trading limit will vary in terms of products, contracts and investors,” said Reuters, citing a statement on the DCE website.
That followed a warning from the exchange on Monday in which it stated that it may raise transaction fees further to curb speculation risks.
The most actively traded September 2016 iron ore contract on the Dalian Commodity Exchange dropped by 4.7% to 365 yuan, leaving it at the lowest level seen since early March.
If that loss is maintained or built upon on Friday, it points to the likelihood that the spot price will fall by a similar margin when Metal Bulletin releases its iron ore index at 8.30pm AEST.
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