Iron ore spot markets finished mixed on Friday with a strong bounce in the benchmark masking an iffy performance elsewhere.
However, with Chinese futures soaring in overnight trade on Friday, Monday looks set to herald broad-based gains.
According to Metal Bulletin, the price for benchmark 62% fines jumped 2.2% to $71.50 a tonne, leaving it within touching distance of the multi-month high of $72.68 a tonne struck in early December.
Despite the bounce in the benchmark, it didn’t extend to lower or higher grade ores.
The price of 58% fines finished flat at $40.06 a tonne while ore with 65% Fe content fall 0.1% to $86.50 a tonne.
The mixed performance followed a bounce in Chinese futures following several days of losses.
Rebar futures in Dalian closed up 0.1% at 3,824 yuan a tonne, a sharp turnaround having hit a low of 3,770 yuan a tonne earlier in the session.
“The restrictions on steel production are still limiting supply, and, for the moment, demand is still okay, especially in the southern part of China,” a Shanghai-based trader told Reuters.
“Some areas in the south are lacking supply and they have to import from the north.”
Shanghai Steelhome will release updated rebar inventory data on Monday.
The strength in steel futures also helped to spur gains in iron ore contracts on Friday.
The May 2018 iron ore contract in Dalian closed the day session up 1.4% at 508 yuan, partially reversing a steep decline reported on Tuesday.
And, as seen in the scoreboard below, the rebound seen during Friday’s day session extended in overnight trade.
SHFE Rebar ¥3,885 , 2.08%
DCE Iron Ore ¥531.50 , 6.19%
DCE Coking Coal ¥1,316.50 , 5.28%
DCE Coke ¥2,151.00 , 6.17%
The strength in rebar and iron ore futures points to the likelihood that iron ore spot markets will follow suit with strong gains today, potentially seeing the benchmark price lift to a new multi-month high.
Trade in Chinese commodity futures will resume at midday AEDT.