Iron ore spot markets edged higher on Monday after two days of heavy losses, and with Chinese futures pushing higher again overnight, it looks like that move may extend into Tuesday trade.
And that means another test of $70 could be on the cards.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 1.07% to $67.86 a tonne, largely reversing a similarly-sized decline on Friday.
Like the benchmark, lower grade ores rose during the session, albeit by a smaller margin.
58% fines rose by 0.65% to $46.40 a tonne while ore with 65% Fe content was unchanged at $84.30 a tonne.
The modest recovery followed a rebound in Chinese commodity futures earlier in the session, led by rebar contracts in Shanghai.
That helped to boost iron ore futures traded in Dalian, likely contributing to the gains seen across spot markets on Monday.
According to Westpac, a combination of higher steel prices and strong production margins at Chinese steel mills have helped to underpin iron ore prices in recent months, offsetting the threat posed by ballooning port inventory levels in China.
In overnight trade, both iron ore and coking coal futures continued to push higher while rebar contracts were largely unchanged, hinting that the rebound in iron ore spot markets may continue today.
Here’s the final scoreboard from overnight.
SHFE Rebar ¥3,515 , 0.23%
DCE Iron Ore ¥515.50 , 1.08%
DCE Coking Coal ¥1,260.50 , 1.86%
DCE Coke ¥1,923.50 , 0.92%
The September 2017 iron ore contract closed up 1.08% at 515.5 yuan per tonne, marginally above the 512 yuan per tonne level it finished Monday’s day session.
Trade in Chinese commodity futures will resume at 11am AEST.