Iron ore markets are quiet

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Iron ore spot markets finished mixed on Wednesday, largely overlooking an ugly fall in futures markets during the session.

According to Metal Bulletin, the spot price for benchmark 62% fines dipped 0.06% to $72.92 a tonne, leaving it sitting at the lowest level since December 28.

It has now fallen in each of the past four sessions.

Elsewhere, the price action across the grades was mixed.

Ore with 65% Fe content lost 0.6%, settling at $88.50 a tonne. The price for 58% fines bucked the trend, lifting 0.6% to $40.96 a tonne.

Lower grades have now outperformed mid-and-higher grades in each of the past two sessions.

Those moves followed the release of second-tier economic data from China on Wednesday.

Activity levels across the nation’s non-manufacturing and steel industries improved at a slightly faster pace in January compared to December, offsetting a slower improvement in the boarder manufacturing sector.

The mixed performance in spot markets was in stark contrast to the performance of Chinese bulk commodity and steel futures which fell across the board.

Iron ore futures in Dalian finished the session down 1.4% at 510 yuan a tonne, recovering after hitting the a seven week low earlier in the day. Rebar futures traded in Shanghai were also softer, closing down 0.2% at 3,915 yuan a tonne.

As seen in the scoreboard below, all bulk and steel futures contracts managed to add to their Wednesday day session gains in overnight trade.

SHFE Rebar ¥3,951 , 0.84%
DCE Iron Ore ¥509.50 , -0.39%
DCE Coking Coal ¥1,298.50 , 0.74%
DCE Coke ¥2,017.00 , 0.98%

At the margin the modest gains point to the likelihood of a stabilisation in iron ore spot markets on Thursday.

Trade in all commodity contracts will resume at midday AEDT, 45 minutes before the release of the Caixin-IHS Markit China manufacturing PMI report for January.

Compared to the government’s official PMI report released yesterday, financial markets tend to pay more attention to this smaller private-sector survey.

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