Watch for a sell off in iron ore stocks on the ASX today after a sharp fall on Friday as Chinese iron ore prices fall under $US70 a tonne and head lower after the roughest week for the commodity for more than three months.
The Trump steel tariffs of 25% helped (and 10% on aluminium) send prices lower, but also driving the iron ore price lower was a sell off in the steel market.
Some prices quoted outside the futures market were down around $US68 a tonne, against the index price close of just over $US70 a tonne, according to the Metal Bulletin.
Futures contract for coking coal down more than 3% on Friday and that for copper off 2.1% and the ASX 300 Mining & Metals index fell almost 2% on Friday per cent to its lowest in almost three months.
Shares in BHP, Rio Tinto, Fortescue metals and others will be under pressure in what will be an upbeat markets as a result of the near 12% slide in iron ore prices last week.
The Metal Bulletin index price for 62% ore closed at $US70.09 per tonne cfr northern China – down 4.2% on the day and after a 3.4% slide in Thursday.
Last week’s sell off saw BHP shares fall 4.4%, Rio shares lost 4% and Fortescue shares were down 3.2%.
The Metal Bulletin reported that “Physical iron ore prices fell below the $70-per-tonne-cfr mark on Friday March 9 amid persistent losses in China’s steel and futures markets.”
“The country’s spot rebar and hot-rolled coil prices also fell by 30-80 yuan ($US4.70-$US12.60) per tonne during the day.
“Iron ore transactions reported out of Chinese ports have already fallen below a seaborne equivalent price of $68 per tonne cfr China, while the April iron ore swaps contract on the Singapore Exchange also fell close to that level before recovering above,” The Metal Bulletin reported.
The most traded steel rebar (reinforcing bar) contract in Shanghai slumped by 3.7% to a three and a half month closing low on Friday according to Reuters.
A week earlier (March 2), the Metal Bulletin’s 62% Fe Iron Ore Index closed at $US78.34 per tonne cfr Qingdao, down by $US1.05 a tonne from Thursday and 48 cents from the $US78.82 of the previous Friday.
