You are using an older browser version. Please use a supported version for the best MSN experience.

Money Top Stories

The iron ore price slide appears to be slowing

Business Insider Australia logo Business Insider Australia 13/03/2018 David Scutt
a group of people sitting at a table © Provided by Business Insider Inc

Iron ore spot markets have stabilised after several days of heavy losses.

According to Metal Bulletin, the price for benchmark 62% fines fell 0.2% to $69.78 a tonne, it's eighth straight day of losses.

That's now the longest losing streak since July 2015.

© Provided by Business Insider Inc

However, while the benchmark fell, lower and higher grades bucked the trend, rising for the first day in over a week.

Ore with 65% Fe content rose 0.5%, settling at $86.40 a tonne. 58% fines added a smaller 0.3%, finishing the session at $40.47 a tonne.

The mixed performance came amidst ongoing concerns about the outlook for Chinese steel demand, said Vivek Dhar, Mining and Energy Commodities at the Commonwealth Bank.

"Markets are worried that China’s steel mills will struggle to clear its excess steel inventory, which has built up in anticipation for stronger demand during the construction season," he said in a note released during the session.

"We think there are valid concerns over China’s steel consumption this year, particularly as China’s property sector faces headwinds from policy. More broadly, a clampdown on credit growth, will weigh on China’s commodity demand this year."

Dhar predicts a smaller increase in Chinese commodity demand than seen in 2017, adding that his forecast faces downside risks if construction activity struggles to pick up in coming months.

Souring sentiment towards the outlook for steel demand weighed on rebar futures in Shanghai which closed Tuesday's day session off 0.65% at 3,695 yuan a tonne.

Those losses extended to iron ore, coking coal and coke futures traded separately in Dalian which closed at 479 yuan, 1,251.5 yuan and 1,988 yuan a tonne respectively.

The losses in coal were particularly acute, a move that continued in overnight trade on Tuesday.

Here's the final scoreboard for the session.

SHFE Rebar¥3,697,-0.40%
DCE Iron Ore¥482.00,0.42%
DCE Coking Coal¥1,249.00,-0.95%
DCE Coke¥1,974.00,-1.30%

While coking coal and coke contracts continued to slide, iron ore and rebar futures managed to buck the trend, closing fractionally higher for the session.

Overnight price action in Chinese commodity futures had not been a reliable indicator for movements in spot markets in recent weeks.

Trade in all four contracts will resume at midday AEDT, one hour before the Chinese government releases industrial output, urban fixed asset investment and retail sales figures for February.

Also keep an eye out for any potential reaction to reports that US President Donald Trump is asking members of his administration to come up with new tariffs and trade restrictions on China.

This has only recently broken, coming after the close of Chinese futures in overnight trade.

Loading...

Load Error

More From Business Insider Australia

Business Insider Australia
Business Insider Australia
image beaconimage beaconimage beacon