Iron ore prices bounced back on Thursday after falling steeply earlier in the week.
Spot markets rose on Thursday with the price benchmark of 62% increasing to $76.27 a tonne, a 1.3% surge which moved prices towards a recent cyclical peak of $76.71 a tonne as reported by Metal Bulletin.
Meanwhile, the price of 58% fines edged 0.7% higher, closing at $45.62 a tonne for the session and Brazilian fines remained at $96.80 in the same period.
If this year is anything to go off, it seems that economic conditions are setting us up nicely for a commodity come back. But when it comes to investing in something as mammoth as iron ore, it can be tricky.
This is why Money Morning’s resource expert Jason Stevenson has given his top 10 mining stocks trading on the ASX to save you the trouble. You can read more about it in his report here for free.
Iron ore prices mirror Chinese steel
Spot markets are increasingly sensitive to Chinese steel futures and its movements, which is why we saw spot markets reflect similar movements.
The January 2019 iron ore contract bounced back on Thursday, trading at 520 yuan at its close, which looked more positive than the 512 yuan close on Wednesday.
Meanwhile, Shanghai Rebar futures recovered somewhat from its lowest level since late July, trading higher at 3,986 yuan.
Coking coal futures also moved higher, closing yesterday’s session at 1,358 yuan. Meanwhile, Coke futures were almost untouched, trading at 2,371.5 yuan.
It seems stronger steel prices have supported iron ore prices as well as data which suggested that Chinese crude steel output stayed strong in October, despite facing cuts to production from adverse weather.
What to watch for in iron ore prices
It’s always a good idea to keep an eye on the economic state of China and in turn Chinese steel futures when it comes to understanding and sometimes predicting iron ore prices.
At worst, it’s not a bad idea to keep updated.
But today the movement of such futures doesn’t really offer much direction for the way spot markets will move.
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PS: Aussie investors have seen great results from iron ore investments in the past. But Markets & Money resources analyst, Jason Stevenson believes that your best opportunities lie in smaller, more speculative stocks which aren’t restricted to iron ore. The kind that could see massive share price moves from a single positive drill-hole result. For 10 of his favourite mining stocks on the Aussie market this year, download his free report ‘Top 10 Mining Stocks 2018’ today.