Iron ore spot markets continued to weaken on Friday, falling for the fifth time in six sessions.And with Chinese futures down heavily on Friday evening, that looks set to become sixth decline in seven sessions on Monday.

According to Metal Bulletin, the spot price for benchmark 62% fines fell 0.08% to $86.72 a tonne. It’s now fallen 8.6% from the multi-year high of $94.86 a tonne stuck on February 21, trimming its advance in 2017 to 10%.

Lower grade ores underperformed during the session while the price for higher grades actually increased, the latter perhaps benefiting from renewed strength in Chinese coal futures.Analysts at Metal Bulletin put the stabilisation in iron ore markets down to a bounce in Chinese steel prices.

“China’s spot rebar prices rebounded on Friday March 10 after four days of drops amid some gains in the futures and billet markets,” the group wrote on Friday.

“The gains in the futures and billet markets gave support to rebar prices, sending them on a slight rebound.“But after the price rise, trading activity in the market dropped as most buyers are not expecting a continual rise.”

Perhaps reflecting the reluctance of market participants to transact at higher levels, futures markets reversed course and kept on going on Friday evening, suggesting that the weakness in spot and physical markets may continue again on Monday.

The most actively traded May 2017 rebar future slid 1.12%, finishing the session at 3,366 yuan. That dragged on iron ore and coal futures which all lost more than 1.6% over the same period.

 

Source:businessinsider.com.au

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