No respite as iron ore gets smoked again

The enormous, share price ravaging rout in the iron ore price continued overnight with the spot price for benchmark ore falling to yet another all time record low.

According to Metal Bulletin, the spot price for 62% fines fell by a further 41 cents, or 1.05%, to $38.65 a tonne. It left the yearly decline at 45.8%, and was the lowest price recorded since spot pricing first began in mid-2009.

Here’s a chart that shows the year to date performance of the benchmark spot price.

And here is its longer term performance, going back to May 2009 when daily pricing first began. From the record peak set in early 2011, the price has now fallen by 80%.

The continued slide in the spot price came despite news that Chinese iron ore import volumes, along with exports volumes from Port Hedland in Australia – the nation’s largest iron ore loading port – rebounded strongly in November.

“China imported 82.13 million tonnes of iron ore last month, compared with 67.4 million tonnes a year earlier. Volumes were also up almost 9% from the 75.52 million tonnes imported in October,” noted analysts at Metal Bulletin in their Tuesday note.

“Total iron ore imports for the first eleven months of this year amounted to 856.55 million tonnes, largely flat with year-earlier levels. China’s domestic run-of-mine (ROM) output totalled 1.13 billion tonnes in January-October, down 9% from the same period of 2014, NBS data shows.”

Along with the rebound in Chinese import volumes, iron ore export volumes from Port Hedland rebounded modestly in November, including to China.

According to cargo statistics released by the Pilbara Ports Authority on Monday, iron ore shipments rebounded by 2.3% to 37.334 million tonnes, leaving the year-on-year increase at 8.5%. Shipments to China rose to 31.734 million tonnes, a 3.3% increase on the 30.717 million level of October. Cargo volumes increased by 9.3% from a year earlier.

Helping to explain why the spot price remains under pressure, the rebound in iron ore volumes received by China coincided with news that steel output in China is continuing to decline.

According to data released by the National Bureau of Statistics (NBS) on Tuesday, Chinese steel production fell to 675.1 million tonnes between January to October this year, down 2.2% on the same period a year earlier.

As a consequence of the rebound in import volumes and falling steel production, Chinese iron ore port inventories continue to build, rising to 89.5 million tonnes last week according to data released by Shanghai Steelhome Information Technology, the largest level seen in seven months.

In overnight trade the January 2016 ion ore futures contract on the Dalian Commodities Exchange fell by a further 0.33% to 301.5 yuan, suggesting that further weakness in the spot price may arrive this evening.

Trade in Dalian resumes at 12pm AEDT. Metal Bulletin will release its daily fixing at 10pm AEDT.

Follow Business Insider Australia on Facebook, Twitter, and LinkedIn