- Iron ore’s losing streak is over.
- The benchmark price jumped over 3%, its largest gain in over a month.
- Chinese spot steel prices fell to a multi-week low on Wednesday, perhaps prompting renewed demand from end-users.
Iron ore’s losing streak came to a spectacular end on Thursday, logging the largest gain in over a month.
According to Metal Bulletin, the spot price for benchmark 62% fines surged 3.5% to $65.54 a tonne, its largest percentage increase since April 19.
It was the first increase in six sessions, leaving it at a one-week-high.
The strength in the benchmark was replicated across higher grades, albeit by a slightly smaller margin.
65% fines rallied 1.5% to $84 a tonne.
However, lower grades missed the memo, settling up a measly cent at $38.05 a tonne.
The strength in mid and higher grades followed a reversal in Chinese rebar and iron ore futures earlier in the session.
Rebar futures in Shanghai finished trade at 3,583 yuan, well above Wednesday’s night session close of 3,526 yuan.
Iron ore futures in Dalian were also bid, rattling higher in late trade to close at 459.5 yuan, recouping steep losses seen earlier in the session.
The bid in rebar and iron ore contracts may reflect that spot steel prices in China fell to a three-week low on Wednesday, perhaps prompting renewed demand from end-users.
“Bulk commodities snapped a five-day losing streak as sentiment in the Chinese steel market picked up,” said analysts at ANZ Bank.
“Hot-rolled coil futures rose 1.7% while steel rebar was up 1.5%. This helped push iron ore futures higher, both on the Dalian and Singapore Exchanges.”
As seen in the chart below, both contracts continued to climb in overnight trade.
SHFE Rebar ¥3,606 , 1.63%
DCE Iron Ore ¥462.00 , 0.98%
The strength points to the likelihood that spot markets will follow suit today, at least in early trade.
All Chinese commodity futures will resume trade at 11am AEST.
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