The spot iron ore price ripped higher overnight, recording one of the largest gains in months as Chinese markets resumed trade following Lunar New Year celebrations.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by $2.61, or 5.98%, to $46.26 a tonne on Monday, taking it back to levels not seen since November 18 last year.
At 5.98%, the increase was the largest in percentage terms since July 9, 2015, and left the year to date increase at 6.17%.
The gain, coming on the day Chinese markets re-opened after the week-long Lunar New Year break, came despite news that Chinese iron ore imports fell modestly in January.
“China’s iron ore imports rose 4.64% year-on-year in January with prices for the steelmaking raw material experiencing volatility throughout the month and sliding just below $40 per tonne at one point,” said analysts at Metal Bulletin.
“The country imported 82.19 million tonnes of iron ore last month, compared with 78.54 million tonnes a year earlier, according to preliminary customs data published today. Volumes were, however, down 14.63% from the record 96.27 million tonnes that China received in December last year.”
The weaker demand may have been as a result of weather-related disruptions from Australia’s Port Hedland iron ore loading terminal, the largest source of seaborne iron ore supply globally.
Indicating that the bounce in the spot price may continue into a second consecutive session, Chinese iron ore futures finished Monday’s evening session higher.
The most actively traded May 2016 contract on the Dalian Commodities Exchange added 1.04% to 340.5 yuan, indicating that the spot price may continue to push higher should those gains be maintained, or extended, during today’s day session beginning at 12pm AEDT.
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