Iron ore markets grind to a halt

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  • Iron ore spot markets bounced modestly on Friday despite large losses in futures earlier in the session.
  • Chinese markets are currently closed for National Day holiday celebrations.
  • Business Insider will only report on spot markets if there’s movement during this period. Often there’s not.

Iron ore spot markets rebounded on Friday, completely ignoring a large slide in Chinese futures earlier in the session.

According to Metal Bulletin, the price for benchmark 62% fines rose 0.8% to $69.24 a tonne, leaving it within touching distance of the multi-month high of $69.82 a tonne struck earlier in September.

Lower grade ores also rallied with the price for 58% fines jumping 1.2% to $40.60 a tonne.

The price of 65% Brazilian fines missed the broader rally, remaining unchanged at $96.40 a tonne.

The gains in mid and lower grades may have been driven by continued weakness in Chinese steel futures earlier in the session.

According to data from the Shanghai Futures Exchange, the January 2019 rebar contract finished trade at 3,944 yuan, recovering after tumbling to as low as 3,907 yuan earlier in the day, the lowest level since July 27.

It had finished Thursday’s night session at 3,910 yuan, indicating that traders pared initial losses into the close.

Hot-rolled coil futures also bounced after hitting multi-month lows, closing at 3,869 yuan.

Iron ore, coking coal and coke contracts also rebounded, finishing Friday’s day session at 495.5, 1,272.5 and 2,2635.5 yuan respectively, up from Thursday’s night session close of 489, 1,249 and 2,2206 yuan.

The wild price action may reflect the impact of traders squaring up positions ahead of a week-long holiday in China that began on October 1.

Spot markets will likely remain quiet until National Day celebrations wrap up in China on October 5. Futures markets will also be closed over this period.

That was already evident on Monday with the price for 62%, 58% and 65% fines all holding steady during the session.

The rule of thumb during this period will be that if spot markets move, we’ll report on it. If they don’t, we won’t.

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