Iron ore futures are surging before the release of key economic data from China today

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Iron ore spot markets put in a mixed performance on Friday with the benchmark price tumbling over 2% while higher and lower grades rose.

According to Metal Bulletin, the spot price for 62% fines fell 2.1% to $68.73 a tonne, its largest one-day percentage fall since July 20.

As a result of the slide, it trimmed the benchmark’s increase from June 13 to 28.8%.


However, despite the weakness in the benchmark, it was not replicated across higher and lower grade ores.

The price for 58% fines added 1.56% to close at $48.72 a tonne. Ore with 65% Fe content also bucked the trend, gaining a smaller 0.35% to settle at $85.60 a tonne.

Metal Bulletin put the gains in most grades down to a rebound in Chinese steel markets during the session.

“China’s spot rebar prices bounced back on Friday as trading activity picked up,” the group said.

“Trading increased just before the weekend since a number of buyers had stayed away from the market in recent days.”

And that move continued in rebar futures on Friday evening, helping to drag iron ore futures higher in response.

Here’s the final scoreboard from Friday’s night session.

SHFE Rebar ¥3,606 , 1.15%
DCE Iron Ore ¥545.00 , 3.12%
DCE Coking Coal ¥1,283.50 , 0.94%
DCE Coke ¥1,973.50 , 1.21%

Some big gains — especially for Dalian iron ore — suggesting the weakness in the benchmark spot price on Friday could well reverse today.

Whether the move in futures translates to strength in spot markets later today may be determined by the release of Chinese economic data later in the session.

China’s National Bureau of Statistics (NBS) will release manufacturing, non-manufacturing and steel industry Purchasing Managers Indices (PMIs) at 11am AEST, the same time that Chinese commodity futures reopen.

All three reports — particularly the latter given its relevance to iron ore demand — carry the potential to shift sentiment across the steel markets on Monday.