After a prolonged period of low volatility, at least by recent norms, the iron ore market sprung back to life on Tuesday, recording its largest increase since April 29.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 2.65%, or $1.44, to $55.78 a tonne, leaving its year to date gain at 28%.
The gain in the spot price followed a significant increase in Chinese iron ore, coking coal and rebar future trade on Tuesday, signalling that there are still elements of speculative behaviour prevalent in the market.
Adding weight to this view, the most actively traded September 2016 iron ore future on the Dalian Commodities Exchange rose by a further 2.14% in overnight trade, adding to the near 5% price gain seen on Tuesday.
Trade in Chinese commodity futures will resume at 11am AEST. The release of Chinese house price data for April at 11.30am AEST may be influential on intraday movements in futures markets should recent history be anything to go by.