Iron ore is staging another enormous rally, rebounding strongly after several days of losses at the end of last week.
And, if Chinese futures are anything to go by, it looks like that form may extend into Wednesday trade.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped by 2.4% to $69.48 a tonne, extending its rally over the past two sessions to 3.5%.
It was the second-highest settlement level since April 11 this year.
Both higher and lower grades also rose over the session, albeit by a smaller margin.
58% fines and ore with 65% Fe content added 1.7%, closing at $47.18 and $85.70 a tonne respectively.
The strength in spot markets followed another rollicking rally in Chinese steel futures earlier in the session.
“The steady rise in the futures market during the day encouraged spot rebar sellers to increase their offers,” said Metal Bulletin. “The price of billet also rose in the afternoon, which made rebar sellers even more confident about the direction they were taking.”
The strength in rebar futures flowed through to iron ore futures in Dalian which closed Tuesday’s day session with a gain in excess of 3%.
And futures continued to push higher in overnight trade.
Here’s the scoreboard from Tuesday’s night session, revealing broad-based gains across rebar and the bulks.
SHFE Rebar ¥3,620 , 2.26%
DCE Iron Ore ¥531.50 , 2.02%
DCE Coking Coal ¥1,277.50 , 2.00%
DCE Coke ¥1,950.00 , 1.75%
Should iron ore futures hold or extend upon those gains during Wednesday’s day session, it points to the likelihood that the benchmark spot price may top the $70 a tonne level when Metal Bulletin releases its daily Iron Ore Index later today.
Trade in Chinese futures will resume at 11am AEST.