For the fourth session in five, the iron ore price has moved higher.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by as further 36 cents, or 0.9%, to $40.46 a tonne.
It now sits at levels last seen on December 3, and takes the rally from the all time record low of $38.30 a tonne set on December 11 to 5.64%. Year to date it has fallen 43.2%.
Pointing to the likelihood of further gains in the spot price arriving later on this evening, near-dated Chinese iron ore futures rose strongly yet again in overnight trade.
According to pricing from the Dalian Commodities Exchange, the January 2016 contract rose by 3.08% to 335 yuan. While movements in front-month futures are generally more in line with those of the spot price, the most actively traded May 2016 contract slipped fractionally, dropping 0.16% to 305.5 yuan.
The strong gains in spot and near-dated futures were likely due to renewed strength in steel prices, according to analysts at Metal Bulletin.
“In the steel market spot rebar prices in the eastern market have risen by 100 yuan ($15) per tonne over the past week, buoyed by robust rebar futures,” they wrote.
“The rises prompted Shagang – the region’s largest privately-owned mill – to lift its longs prices by 30 yuan ($5) per tonne this morning, which further boosted market sentiment. The most-traded May rebar futures contract on the Shanghai Futures Exchange closed at 1,749 yuan ($270) per tonne on Monday, up 37 yuan ($6) per tonne from the previous day’s closing price.”
The May 2016 rebar contract on the Shanghai Futures Exchange last traded at 1,737 yuan.