Almost by stealth, the iron ore price is on the cusp of reclaiming the $50 a tonne level.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 2.93%, or $1.38, to $48.52 a tonne on Friday, leaving it at the highest level seen since November 11 last year.
For the week, the price put on 11.2% — its largest five-day percentage rally since July 2015. From the record low of $38.30 a tonne struck on December 11 last year, the benchmark price has now put on 26.7%. Year-to-date it currently sits up 11.4%.
Truly a remarkable rally given pessimism towards the commodity seen earlier in the year.
According to analysts at Metal Bulletin, the rally coincided with renewed strength in Chinese steel prices.
“China’s domestic rebar market continued to strengthen after levels in the north of the country surged on Thursday on rising billet prices, although the pace of gain began to slow,” said Metal Bulletin.
Indicating that the rally may extend today, Chinese iron ore and rebar futures rose strongly in overnight trade on Friday.
The most actively traded May 2016 iron ore futures contract on the Dalian Commodities Exchange last traded at 343.5 yuan, representing an increase of 1.63% for the session. That gain slightly shaded a 1.52% rally for rebar futures on the Shanghai Futures Exchange.
Should those gains be maintained or built upon today, it points to the likelihood of another bounce in the spot iron ore price arriving later in the session.
Trade in Chinese futures will resume at 12pm AEDT.