Chinese futures continued to slide for the second consecutive days as the market headed toward correction after the rally last week.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for September delivery, decreased slightly by 0.33% to RMB 757 per tonne on Tuesday.
The steel rebar contract on the Shanghai Futures Exchange also dropped by 0.72% day-on-day to RMB 3,610 per tonne.
Selling pressure in the market
Due to the price rally, some market participants were looking to close market positions before another bout of illiquidity set in.
In the meantime, some traders were trying to take some profit-takings from the recent price upticks.
Going forward, further price corrections are expected due to the much availability of Australian spot supply, as there is always huge push of iron ore volumes for the miners toward the end of Australian fiscal year.
Thus, this may prompt a sharp backwardation of July cargoes, however, China’s low port iron ore inventory may still support buying interests to some extends,
More trades done with newly launch platform
A flurry of trades was done on newly launched physical trading platform for iron ore on Monday, by HBIS International Ore Supermarket.
On its first day, the platform concluded three seaborne trades totaling 445,000 mt and four portside trades of 36,500 mt.
On the second day, 23 Jun 2020, the platform recorded portside trades of around 91,000 mt by 1130 hours.
The new platform differentiated from existing trading platforms of COREX and globalORE by making the bids and offers open to all companies registered and approved by HBIS.
Moreover, HBIS will back all the trades concluded on Ore Supermarket, thus if a party default from a trade, HBIS will step in and guarantee the trade settlement with the counter-party.