Chinese iron ore futures continued to rip higher overnight, adding to the 8% surge seen during Monday’s day session.
Here’s the final scoreboard from overnight trade.
SHFE Rebar ¥3,745 , 2.24%
DCE Iron Ore ¥582.00 , 4.96%
DCE Coking Coal ¥1,339.50 , 2.72%
DCE Coke ¥2,051.00 , 1.79%
The September 2017 iron ore contract in Dalian closed at 582 yuan per tonne, leaving it sitting at the highest level since March 24. That was also well above the 570.5 yuan level it finished Monday’s day session.
Rebar futures also continued to push higher, finishing at 3,745 yuan per tonne, the highest level since April 2013. They closed Monday’s day session at 3,733 yuan per tonne.
Should the gains in both contracts be maintained or built upon today, it points to the likelihood that spot iron ore markets will add to the 7% plus gains achieved on Monday.
The spot price for benchmark 625% fines currently sits at $73.70 a tonne, according to Metal Bulletin, leaving it at the highest level since April 11. It has rallied 38.1% from June 13.
After the release of official manufacturing and non-manufacturing PMI reports from the Chinese government on Monday, markets will receive the separate Caixin-IHS Markit manufacturing PMI report for July later today.
This private sector survey tends to focus on small and medium-sized manufacturing firms operating in China, differing it from the government’s survey which looks at firms of all sizes.
In the government’s manufacturing report activity levels for small and medium-sized firms deteriorated in July, suggesting that the risk today could be for a reading below the 50.4 level reported in June.
It will arrive at 11.45am AEST, 45 minutes after the resumption of trade in Chinese commodity futures.