Australian mining companies have kicked off the week in style, with the ASX200 resources index up by 2.3% in afternoon trade.
While the rest of the index has also pushed higher, miners are setting the pace and its most likely due to the price action on China’s Dalian Commodities Exchange (DCE).
In the midday trading session between 10-2 on the DCE, iron ore futures rocketed 8% higher. That’s as high as prices can go in intra-day trade before the DCE enforces a “limit-up” restriction.
As a pure-play iron ore miner, Fortescue has been the best placed of the big miners to benefit from iron ore’s rapid ascent. A short time ago FMG shares were up by 5.9%%.
Rio Tinto and BHP have also posted strong gains for the session, a short time ago up by 3.18% and 2.68% respectively.
With gold prices benefiting from a weaker US dollar, gold miner Newcrest Mining has also rallied by around 2.3%.
The DCE reopened at 3pm AEST and will operate until 5pm, before daily spot prices for iron ore are released later this evening.
A short time ago, iron ore futures remained “limit-up” suggesting that spot prices are poised to rise strongly.