Iron ore markets remain unusually quiet

PAUL ELLIS / AFP / Getty Images

Iron ore spot markets finished mixed on Tuesday with lower grades outperforming higher grades during the session.

According to Metal Bulletin, the price for benchmark 62% fines rose 0.7% to $62.42 a tonne, largely reversing a similarly sized decline on Monday.

As seen in the chart below, the recent price action remains choppy and directionless.

Lower grades also manages to eke out small gains with 58% fines adding 0.1% to $36.69 a tonne.

Higher grades, however, were under pressure with ore with 65% Fe content sliding 1.5% to $83.60 a tonne.

The premium for iron ore lump over the benchmark price also fell to $22 a tonne, the smallest margin since August 21 this year. Lump usually trades above the price for fines because it can be directly used in blast furnaces, avoiding the sintering process required for fines.

Higher grade and lump iron ore lump has outperformed lower grades in recent months, benefiting from looming steel production curbs in China that will be fully implemented by the middle of November. The cuts have been introduced in an attempt to improve air quality in China’s northern provinces over winter.

Providing few clues as to what direction spot markets will move on Wednesday, Chinese bulk and rebar futures meandered their way through Tuesday’s night session.

Here’s the final scorecard.

SHFE Rebar ¥3,732 , 0.05%
DCE Iron Ore ¥459.50 , -0.11%
DCE Coking Coal ¥1,091.00 , -0.86%
DCE Coke ¥1,691.00 , -0.38%

Rebar futures in Shanghai and iron ore futures in Dalian closed Tuesday’s day session at 3,739 yuan and 457.5 yuan respectively.

Trade in these markets will resume at midday AEDT.

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