It wasn’t just Donald Trump who completed a stunning comeback yesterday.
After years of relentless price declines, iron ore also completed a comeback, hitting the highest level seen in nearly two years.
Quite a turnaround, and one that few expected. Sound familiar?
According to Metal Bulletin, the spot price for benchmark 62% fines surged by 3.92% to $70.98 a tonne, surpassing the previous peak of $70.26 a tonne struck on April 21.
The price hasn’t been this high since January 9, 2015.
It has now added 27.1% over the past month, extending its gain in 2016 to a jaw-dropping 62.9%. From the all-time record low of $38.30 a tonne struck on December 11 last year, it’s added 85.3%.
Analysts at the Steel Index put the gain in spot markets down to continued strength in coking coal prices, something that has helped to support bulk commodity futures prices in China.
“The interminable surge in coking coal price continues to influence the whole ferrous complex,” it said.
“In China the onshore futures market boomed again today. The Dalian Commodities Exchange iron ore futures went up to the limit while Shanghai Futures Exchange rebar futures jumped 5.27%.”
And, if you thought those gains in futures were massive, you haven’t seen anything yet.
They went bananas in overnight trade.
The most actively traded January 2017 iron ore contract on the Dalian Commodities Exchange closed the overnight session up a whopping 9% at 588 yuan.
Quite an effort, particularly as the contract specification from the exchange says that the maximum daily move in either direction is only 6%.
It now sits at the highest level since October 2014.
If that gain holds today — and it looks like it will — it could see an even larger move in the spot price come later in the session.
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