The iron ore price, while volatile, is on a tear.
Overnight the spot price for 62% fines rose by $1.49, or 2.70%, to $56.78 a tonne according to Metal Bulletin.
Not only is the price sitting at the highest level since July 1, from the record-low level of $44.59 struck on July 8, it’s risen by 27.3%.
The seaborne iron ore market was highly active as participants looked to conclude business ahead of the SG50 Singapore national holiday. The high volumes transacted on and off platforms led to price increases across all of the indices, according to Metal Bulletin.
Perhaps explaining the bounce in the iron ore price, it’s also been confirmed that China’s government has ordered steel mills surrounding Beijing to close for two weeks ahead of a military parade scheduled for September 3.
Here’s Metal Bulletin on the government’s apparent desire to have “blue skies” for the parade.
“Beijing has outlined plans to ensure blue skies for its early September military parade by implementing pollution-reduction measures later this month. Factories and mills have been ordered to either halt or limit production from August 20 to September 4, according to a government document seen today. All construction works are also to be suspended during the period, according to the order. Apart from the capital, the neighbouring regions of Tianjin, Hebei, Shandong, Shanxi and Inner Mongolia will also implement similar measures to ensure good air quality during the September 3 parade”.
With demand being brought forward to compensate for the closure period, it may be contributing to the bounce in the spot price seen recently.