Iron ore moves towards fresh highs

LUDOVIC MARIN/AFP/Getty Images
  • Iron ore spot markets rose on Thursday, helped by a late bounce in Chinese steel futures.
  • The price for benchmark 62% fines increased 1.3% to $76.27 a tonne, moving back towards the recent cyclical peak of $76.71 a tonne struck in late October.
  • Data from CISA revealed average daily crude steel production remained strong in October despite temporary output curbs, another factor that may have helped support prices during the session.

Iron ore spot markets rose on Thursday, helped by a late bounce in Chinese steel futures.

According to Metal Bulletin, the price for benchmark 62% fines increased 1.3% to $76.27 a tonne, moving back towards the recent cyclical peak of $76.71 a tonne struck in late October.

58% fines also inched higher, settling at $45.62 a tonne, up 0.7% for the session.

The price of 65% Brazilian fines was steady at $96.80 a tonne.

The rebound in spot markets mirrored similar price action in Chinese steel futures earlier in the session.

After falling to as low as 3,878 yuan earlier in the session, a level not seen since late July, rebar futures in Shanghai rebounded to 3,986 yuan, up marginally from Wednesday’s night session close of 3,958 yuan.

Hot-rolled coil futures also bounced after falling in early trade.

The reversal in steel futures helped to support iron ore futures traded separately in Dalian.

The January 2019 contract finished trade at 520 yuan, up from 512 yuan on Wednesday evening.

Coking coal futures also pushed higher, closing at 1,358 yuan. Coke futures were near-unchanged at 2,371.5 yuan.

Along with firmer steel prices, the bulks may have been supported by data that showed Chinese crude steel output remained strong in October despite temporary production curbs on environmental grounds.

Data from the China Iron and Steel Association (CISA) revealed average daily crude steel production within the group’s members stood at 1.97 million tonnes between October 1 to 20, nearly identical to September’s average of 1.98 million tonnes.

Unlike the price action seen earlier in the day, futures markets finished mixed in overnight trade, recording largely meaningless moves during the session.

SHFE Hot Rolled Coil ¥3,710 , 0.62%
SHFE Rebar ¥3,977 , 0.94%
DCE Iron Ore ¥521.50 , 1.26%
DCE Coking Coal ¥1,353.50 , 0.48%
DCE Coke ¥2,379.00 , 0.87%

The movements in futures offers no clues as to what direction spot markets will move today.

Trade in Chinese commodity futures will resume at midday AEDT.

NOW READ: Chinese crude oil imports surge to record highs

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.