Spot iron ore markets surged again on Monday, mirroring a jump in Chinese commodity futures earlier in the session.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped by 1.92% to $58.38 a tonne. It was the highest level seen since September 8, and extended its gain in 2016 to 34%.
Since Golden Week holidays in China at the start of October, the price has gained close to 5%.
Analysts at Metal Bulletin put the strength in spot markets down to earlier exuberance in Chinese futures trade, helping to boost sentiment in spot markets.
“Coking coal, iron ore and rebar futures all experienced big gains during the day, which generated bullish sentiment in the spot market, pushing prices up further for rebar,” the group said.
“The significant price rise led buyers to start procuring materials amid fears of further price increases.”
Fear of missing out, or FOMO, as it is known, may have contributed to Monday’s gain.
Suggesting that FOMO may be replaced by buyers’ remorse on Tuesday, Chinese iron ore futures dipped in overnight trade, indicating that weakness in spot markets may follow if the relationship between the two is maintained.
The January 2017 contract on the Dalian Commodities Exchange last traded at 432.5 yuan, down 1.82% for the session. There were also falls recorded in rebar and coking coal futures, albeit by a smaller margin.
Trade in all Chinese commodity futures will resume at midday AEDT.