Iron ore futures slumped on Wednesday morning in London on fresh concerns over rising US-China tensions after US forced the closure of the Chinese Consulate at Houston.
Iron ore futures initially held firm, with Aug hovering around mid-108 despite China’s Ministry of Industry and Information Technology warned on Tuesday that current iron ore prices have become disconnected from fundamentals, according to China’s Steel and Iron Association.
A sell-off began twenty minutes before the close of the DCE session, triggered by onshore profit-taking, with large long covering which saw about 3.89% of open interest evaporated during the period. Onshore DCE fell by 12 RMB to as low as 836.5 before rebounding to close 841.5. Aug contract on Singapore Exchange briefly drifted below 108 before closing out at 108.1. Aug drifted below 108 to trade as low as 107.3 while Jul traded at 108.15.