While the spot iron ore price was hammered overnight, registering the largest one-day fall on record with the price falling to its lowest level since records began in 2009, there is potentially some light at the end of the tunnel.
Overnight the Dalian September iron ore futures contract rose strongly, bouncing 11.5 yuan, or 3.26%, to 364 yuan.
While the contract price has been absolutely smashed in recent weeks, it’s down 20% from June 25, if the gain in futures can be sustained today it will mark the first time in ten trading sessions that an increase has been recorded.
This suggests the spot price may recover modestly this evening having tumbled over 10% on Wednesday.
However, given the strong downtrend, its highly debatable whether this is indeed the bottom.