It was a disappointing offshore session for iron ore with the commodity falling for the third straight session, down 3.7% to US$62.10.
According to Business Spectator, iron ore for immediate delivery to the port of Tianjin in China had fallen from its previous close of US$64.50.
At issue were “ongoing concerns about the strength of the Chinese steel sector.”
According to Business Spectator, the percentage decline was iron ore’s steepest since April 29.
However, the commodity is still well above the April low of US$46.70 despite falling five percent over the past three days.
Steel prices have weakened, returning to April levels and production is expected to be flat through China’s summer.
The previous run-up in prices was driven by low Chinese iron ore port stockpiles.
More generally, Chinese growth is slowing, while analysts fear that new iron ore production from Vale, Rio Tinto, BHP Billiton and Roy Hill will further depress prices, with many predicting prices to average US$50 to US$53 for FY 2016.