While the spot iron ore plummeted overnight, reversing around half of Monday’s record-breaking surge, perhaps it’s too soon to write-off the iron ore rally just yet.
Overnight Dalian iron ore futures last traded up 5.23% at 442.5 yuan. Not only is that limit up for the session, capping any potential gains today, it was also the highest level seen since June 25 last year.
Rebar futures, or steel, also put in a barnstorming performance, rising 4.1% in overnight trade to 2,183 yuan. The last traded price was also the highest seen since June 25 last year.
Here’s the chart for iron ore and rebar futures over the past year.
While these are derivative markets, not physical spot transactions, the scale of the gains suggests there could be more volatility for the spot iron ore price today, this time to the upside.
Trade in Chinese futures will resume at 12pm AEDT.