The iron ore price saw strong gains earlier this, week which added to yesterday’s rise. Increases were recorded across both lower and higher grades.
The benchmark price held soundly at a seven-month high as 62% fines reached a spot price of $71.14 a tonne, up 2.5% from Tuesday.
Although Wednesday’s session closed prior to the vicious sell off in the US and foreign markets, Chinese steel futures during this period faulted.
Will Iron ore price gains continue?
There was resumed strength in spot markets with the price of 58% fines moving up 2.2%, to $41.13 a tonne, recovering from its comparable fall in Monday’s session. Meanwhile, the price of Brazilian 65% fines slowly edged higher at a rate of 0.3% to land, at $97.40 a tonne.
The persistent strength in spot markets is reflected in China’s steel and bulk commodity futures. Shanghai rebar futures closed at 4,055 yuan, climbing modestly since Wednesday night’s session, to 4,042 yuan.
This might have helped gains in Dalian iron ore futures which traded up 515 yuan in comparison to last night’s session finish of 513 yuan.
Adding to the major gains this week was coking coal and coke futures, both of which finished higher at yesterday’s close — finishing at 1,363.5 yuan and 2,458.5 yuan respectively — higher than last night’s close of 1,336 yuan and 2,444 yuan, as reported by Business Insider Australia.
However, Wednesday’s overnight trade saw much of steel and bulk commodity contracts lose the gains made in the day session.
Iron ore prices might be affected by the sell-off market
All contracts baring coking coal fell after Wednesday night’s session.
With future contracts falling by (as reported by Business Insider Australia):
SHFE Rebar ¥4,007, 0.89% DCE Iron Ore ¥513.50, 0.10% DCE Coking Coal ¥1,365.50, 0.77% DCE Coke ¥2,453.50, 0.29%
Currently the losses don’t look too bad, given the robust performance from these futures. However, this might mean that they ended trading before the massive sell-off in the US and European share markets.
Ryan Clarkson-Ledward, For Markets & Money
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