Iron ore futures reverse after surging to record highs on Monday

  • Chinese iron ore futures reversed hard in overnight trade on Monday, pulling back from record highs struck earlier in the day.
  • Chinese iron ore port inventories continued to decline last week. Chinese steel futures also strengthened on Monday. This is usually supportive for iron ore prices.
  • Spot iron ore pricing will resume on Tuesday following a public holiday in Singapore.

The rally in iron ore markets may take breather on Tuesday with Chinese futures closing lower in overnight trade on Monday.

According to data from the Dalian Commodity Exchange, the most actively traded September 2019 iron ore contract slipped to 699.50 yuan, pulling back from a record high of 715.5 yuan struck earlier in the day.

It closed at 709 yuan on Friday evening.

SHFE Hot Rolled Coil ¥3,666 , 0.44%
SHFE Rebar ¥3,818 , 1.14%
DCE Iron Ore ¥699.50 , -1.13%
DCE Coking Coal ¥1,381.00 , -0.68%
DCE Coke ¥2,186.00 , 1.25%

The reversal in futures came despite news that Chinese iron ore port inventories fell by another 1.65 million tonnes last week, according to data from Steelhome Consultancy, leaving stockpiles at an 18-month low of 131.7 million tonnes.

Nor were iron ore futures supported by strength in steel futures on Monday.

The October 2019 rebar and hot-rolled coil contracts listed on the Shanghai Futures Exchange rose to 3,818 and 3,666 yuan respectively, up from Monday’s day session close of 3,780 and 3,646 yuan.

Trade in Chinese commodity futures will resume at 11am AEST.

Spot pricing from Metal Bulletin was unavailable on Monday due to a public holiday in Singapore. The group’s daily Iron Ore Index will be released in early European trade on Tuesday.

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