Iron ore explodes higher, jumping back above $60 a tonne

Photo by Scott E Barbour/Getty Images

Iron ore continued to rip higher on Thursday, jumping back above the $60 a tonne level for the first time since early May.

The benchmark spot price for 62% fines surged by 3.53% to $60.70 a tonne, according to Metal Bulletin, extending the gains so far this week to a giddying 8.65%.

It has now rallied by close to 40% since the beginning of the year, and now sits at the highest level seen since May 3.

Lower grade ore also surged with the spot price for 58% fines rising 2.82% to $48.19 a tonne.

The gains, yet again, coincided with strength in Chinese steel prices, something that analysts at the Steel Index put down to production curbs at some Chinese mills.

“Steel markets in China continued to firm as the authorities conduct environmental checks, resulting in output cuts at some producers,” said the Steel Index. “Spot rebar prices in Shanghai rose by RMB40/t, while those in Beijing gained RMB10/t. Tangshan billet prices gained RMB30/t.”

With Dalian iron ore futures continuing to surge, the group noted that seaborne iron ore markets remained “tight” with “sellers reluctant to let go of cargo in anticipation of further gains, and buyers also taking a wait-and-see approach.”

The most actively traded September 2016 iron ore futures contract in Dalian finished Thursday’s day session at 472.5 yuan, up 3.28% from the previous close.

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