The recovery in iron ore might only be a few days old but the buyers were in again overnight and the price action suggests they have found recent prices represent some value.
For the second days’ trade in a row, the September futures gain of 65 cents a tonne to $84.71 was eclipsed by rises further out the curve. December futures rose $1.21 a tonne to $85.13 – that’s more than $3 a tonne off the low on September 11 of $82.07.
It’s always difficult to explain why a market transitions from the pessimism of last week’s fall to the positive price action of Friday and Monday’s trade, but value is a big part of the equation.
Most pundits are still looking for a recovery to $90 a tonne by the end of the year, so it seems traders are backing their judgement for the moment.