As suggested by Chinese futures yesterday, the spot iron ore price enjoyed a spectacular rally overnight, jumping by the largest amount seen in three months.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped by $2.83, or 5.33%, to $55.97 a tonne. It was the largest percentage gain registered since July 9 this year.
While a huge gain, the increase merely took the benchmark price back to where it was trading prior to China’s Golden Week holiday, which concluded on Wednesday. It fell heavily last Friday on whisper-thin volumes, so the gain overnight appears to be more of a reversal of that move rather than the start of a bullish run higher.
In Chinese futures trade overnight the most actively traded January 2016 contract on the Dalian commodities exchange rose by a further 0.8% to 376.5 yuan, pointing to the likelihood of a further modest rise in the spot price this evening should the gains be sustained today.
Trade in Dalian will resume at midday AEDT.