Iron ore prices fell heavily on August 1, suffering the largest decline in a month.
According to Metal Bulletin, the spot price for benchmark 62% fines slumped 2.4% to $66.55/t, reversing sharply after rising to the highest level in over a month on July 31.
The percentage decline was the largest since June 27.
The $68/t level has proven to be a tough nut to crack for the benchmark this year, trying, and failing, to climb above this level on four separate occasions since April.
Like the benchmark, both lower and higher grade ores were under pressure on August 1.
The price of 58% fines, in particular, was slammed, dropping 4.1% to $37.12/t. The 65% fines fared significantly better, shedding 0.7% to settle at $93.4/t.
The sharp slide coincided with reports the United States was considering upping proposed tariffs on $200 billion worth of Chinese imports from 10% to 25%.
It also followed the release of a soft China manufacturing PMI report from IHS Markit, revealing new exports orders fell at the fastest pace in over two years in July.
Ongoing restrictions on steel production on environmental grounds, limiting potential demand for bulk commodities, particularly less efficient grades, may explain the price divergence seen during the session.
After soaring to fresh multi-year highs earlier in the day on the back of temporary production closures and signs of continued strong demand, steel futures fell heavily in late trade, weighing on bulk commodity contracts traded in Dalian in the process.
Rebar futures in Shanghai, having hit 4,243 yuan/t earlier in the day, finished trade at 4,139 yuan/t. They closed July 31's night session at 4,191 yuan/t.
On July 31, China's steel PMI surged to a seven-month high of 54.8 in July, led by surge in new orders which grew rapidly from a month earlier.
Iron ore and coking coal futures in Dalian also fell, finishing trade at 475 yuan/t and 1,186.5 yuan/t, down from 486 yuan/t and 1,198 yuan/t on July 31 evening.
Sources:sxcoal
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