It looks like the iron ore rally is over, at least for the moment, with Chinese futures hammered in overnight trade.
The May 2017 iron ore future on the Dalian Commodities Exchange slumped by 6.15%, closing the session at 595.5 yuan. It had previously rallied close to 20% in just four sessions of trade.
There were similarly large declines registered for coke and coking coal futures which fell by 5.6% and 4.7% respectively.
Rebar futures, seen by some as a lead indicator for the bulks, dropped by a smaller 2.1%.
There was no statement released by either the Dalian or Shanghai Futures Exchanges on Thursday to explain the sudden reversal.
However, it did correspond with the release of Chinese international trade data for November, something that revealed huge increases in import volumes for coal and iron ore.
Whether that played a role in the reversal, or simply that upside momentum in futures markets eased on Thursday prompting speculators to rush for the exits, remains unclear.
Earlier in the session, the benchmark spot iron ore price eased 0.6% to $81.78 a tonne, according to Metal Bulletin.
Should the losses in futures be sustained, it’s likely that the spot price will fall back below the $80 a tonne level when Metal Bulletin release its iron ore index later in the session.