Iron ore prices lift again

China Photos/Getty Images
  • Iron ore spots markets rallied for a third consecutive session on Monday.
  • All three major grades now sit at multi-month highs.
  • A major Chinese steel maker announced price increases for its products on Monday, helping to boost bulk commodity futures. Speculation over increased Chinese infrastructure spending may have also helped to fuel gains.

Iron ore prices continued to rally on Monday, supported by firmer steel prices.

According to Metal Bulletin, the spot price for benchmark 62% fines rose by 0.6% to $73.51 a tonne, extending its rally from late November to 14.4%.

It now sits at the highest level since November 21.

As was the case in the prior two sessions, both higher and lower grade ore rose in unison with the benchmark.

The price for 65% Brazilian fines jumped 1.4% to $88.60 a tonne, outpaced by an even larger gain in 58% fines which surged 1.9% to $47 a tonne. Both sit at multi-month highs.

The move in spot markets mirrored similar gains in Chinese steel and bulk commodity futures during Monday’s day session.

Having been driven by renewed optimism towards US-Sino trade talks and additional monetary policy stimulus announced by the People’s Bank of China on Friday, the latest burst of buying was helped by news that China’s largest listed steel maker, Baoshan Iron & Steel, will raise prices of some steel products for delivery in March.

Additionally, news that China’s National Development and Reform Commission (NDRC) had approved 860 billion yuan worth of urban rail projects since December 5 may have also helped to lift confidence over the outlook for demand.

Those announcements contributed to Chinese steel and bulk commodity futures rallying over 1% from Friday’s day session close with those gains largely sustained in overnight trade on Monday.

Here’s the closing scoreboard.

SHFE Hot Rolled Coil ¥3,398 , 0.47%
SHFE Rebar ¥3,511 , 0.37%
DCE Iron Ore ¥513.50 , 0.79%
DCE Coking Coal ¥1,187.50 , -0.04%
DCE Coke ¥1,955.50 , 0.13%

All five contracts eased fractionally during the session, although all remain well above the levels they closed at on Friday evening.

Trade in Chinese commodity futures will resume at 12pm AEDT.

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