Iron ore prices rebounded modestly on Friday, recovering the ground lost in the previous two sessions.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 0.9% to $59.39 a tonne, leaving it at the highest level seen since August 25.
Year to date it has gained 36.3%.
Metal Bulletin note the gain — the largest since August 16 — corresponded with the visit of policymakers to key industrial centres in China to check on the status of planned capacity cuts across steel and coal operators.
“The Ministry of Industry & Information Technology announced on its website on September 2 that deputy minister Xin Guobin had gone to the provinces of Hebei, Henan, Jiangxi and Fujian with a team over August 25-September 1 to check on the progress of steel and coal capacity cuts in those regions,” noted the group.
“Xin asked the respective local governments to speed up their efforts and to try to complete their targeted reductions for this year by the end of November.”
While that may explain the huge spike seen in Chinese bulk commodity futures on Friday, contributing to the modest bounce in the iron ore spot price, its influence appears to have already run its course.
The most actively traded January 2016 iron ore future on the Dalian Commodity Exchange finished the overnight session at 424.5 yuan, up 0.12% for the session.
Coking coal futures continued to rally, rising 2.89% to 1,245.0 yuan.
Trade in both contracts will resume at 11am AEST.
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