Iron ore markets remain choppy and directionless

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  • Iron ore spot markets remain choppy and directionless, continuing the theme seen throughout April.
  • Modest gains were recorded across all grades on Friday, partially reversing declines in the previous two sessions.
  • Chinese futures fell slightly in overnight trade on Friday.

Iron ore spot markets remain choppy and directionless, continuing the price action seen since the start of April.

According to Metal Bulletin, the price for benchmark 62% fines rose 0.8% to $64.96 a tonne on Friday, partially reversing the losses seen in the previous two sessions.

It has traded in a less than $2 range since the end of March.

Like the benchmark, modest gains were recorded across the grades.

Ore with 65% Fe content added 0.6% to close at $82.20 a tonne. 58% fines rose by a smaller 0.3% to settle at $37.87 a tonne.

The gains in spot markets followed another sharp reversal in Chinese rebar and iron ore futures, this time to the upside.

After closing Thursday’s night session at 3,387 yuan, the October 2018 rebar contract in Shanghai rallied 1.6% to 3,452 yuan a tonne.

That strength flowed through to iron ore futures in Dalian which finished up 1.2% at 453.5 yuan, above Thursday’s night session close of 446.5 yuan a tonne.

The reversal in futures followed the release of Chinese trade data for March, including news that iron ore imports were almost unchanged in the March quarter compared to the same period a year earlier.

China’s General Administration of Customs said imports totaled 85.79 million tonnes last month, leaving total imports over the quarter at 271 million tonnes.

Others put the rebound in futures down to signs that US trade policy might be starting to soften with President Donald Trump asking advisers to reexamine the merits of joining the Trans-Pacific Partnership (TPP).

Whatever the reason behind the push higher in futures, it was not enough to see those gains sustained in overnight trade on Friday with both rebar and iron ore contracts logging modest losses.

Here’s the final scoreboard.

SHFE Rebar ¥3,438 , 0.47%
DCE Iron Ore ¥450.00 , 0.00%

Given overnight moves in futures haven’t been the best lead indicator of late, the modest pullback offers few clues as to whether spot markets will follow suit today.

Trade in commodity futures will resume at 11am AEDT.

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