Iron ore is quiet ahead of Golden Week holidays

Jonathan Daniel/Getty Images

Ignoring yet another enormous surge in Chinese futures, spot iron ore markets were quiet on Thursday, continuing the trend seen earlier in the week.

According to Metal Bulletin, the spot price for benchmark 62% fines rose by 0.35% to $56.68 a tonne, marking the first increase since Friday last week.

So far this week the price has fallen 0.04%, 0.25%, 0.26% and risen 0.35%, a far cry from the volatility seen earlier this year.

Perhaps the Golden Week holiday in China, starting tomorrow, has been a factor. Despite the decrease in price volatility, analysts at Metal Bulletin suggest that trade remained brisk ahead of the week-long holiday.

After surging by over 11% in the previous eight days — something not mirrored in spot markets — Dalian futures reversed with a thud in overnight trade, closing the night session down 2.63% at 407 yuan. At one point in yesterday’s day session it had been up as much as 4%.

Given the divergent performance between futures and spot markets, it’s hard to read too much into the wild swings in futures trade right now.

Chinese commodity futures will resume trade at 11am AEST, just 45 minutes before the release of the Caixin-Markit China manufacturing PMI report for September, a release that is likely to be market moving.

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