Iron ore remains in consolidation mode

Karen Minasyan/ AFP/ Getty Images

Iron ore spot markets finished mixed on Friday, continuing to consolidate upon the gains achieved earlier in the week.

According to Metal Bulletin, the price for benchmark 62% fines rose 0.5% to $62.60 a tonne, largely reversing a similarly-sized decline on Thursday.

Lower grade ores went the other direction with the price of 58% fines sliding 0.6% to $36.09 a tonne.

Ore with 65% Fe content was stuck somewhere in between, closing flat at $82.40 a tonne.

The premium for iron ore lump over the benchmark price continued to narrow from levels seen in recent months, falling by $3.50 to $18 a tonne, leaving it at the lowest level since June 15.

Along with higher grade ores, lump prices have benefited recently from environmental restrictions on sintering and overall steel production in northern Chinese provinces.

The mixed performance in spot markets followed a modest reversal in Chinese iron ore futures on Friday.

The January 2018 contract in Dalian finished trade down 1.4% at 462.5 yuan, well off the high of 479.5 yuan struck earlier in the session.

Rebar futures in Shanghai also closed well off their highs, finishing up 0.3% at 3,796 yuan.

However, as seen in the scorecard below, rebar and iron ore contracts put in a starkly divergent performance during Friday’s night session.

The former rebounded strongly while the latter continued to unwind.

SHFE Rebar ¥3,840 , 1.32%
DCE Iron Ore ¥459.00 , -0.22%
DCE Coking Coal ¥1,210.00 , 0.21%
DCE Coke ¥1,785.00 , -2.00%

The mixed performance provides no clear guide as to how spot markets will fare today.

Trade in Chinese commodity futures will resume at midday AEDT.

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