Chinese commodity futures have jumped out of the blocks again on Tuesday morning, continuing the bullish price action seen overnight.
And they’re yet again being led by iron ore futures which have put in another barnstorming display.
On current form, it looks like the multi-year high for spot iron ore struck on Monday will be bettered when Metal Bulletin releases its daily Iron Ore Index later in the session.
Here’s the scoreboard after one hour of trade:
SHFE Rebar ¥3,617 , 2.84%
DCE Iron Ore ¥736.50 , 4.47%
DCE Coking Coal ¥1,267.50 , 1.08%
DCE Coke ¥1,749.50 , 1.74%
Just unstoppable, continuing to defy many forecasts that see the outlook for prices as lower, rather than higher.
The May 2017 iron ore futures on the Dalian Commodities Exchange currently sits at the highest level since May 28, 2014.
Analysts have said that strong steel demand following the Lunar New Year holiday, coupled with tight supply, has contributed to the latest batch of buying across futures.
Others have suggested that the move from China to ban imports of coal from North Korea will increase steel production costs, leading to renewed strength in steel billet and rebar prices.