Iron ore prices remain choppy

  • The benchmark iron ore spot price bounced on Friday, recovering some of the ground lost a session earlier.
  • Both spot and futures markets showed little reaction to the introduction of tariffs from the United States and China on the others imports on Friday.
  • Chinese futures were a bit softer in overnight trade.

Iron ore markets climbed on Friday, recovering after falling to a three-month low on Thursday.

According to Metal Bulletin, the spot price for benchmark 62% fines rose 1.1% to $63.84 a tonne, partially reversing Thursday’s 1.7% decline.

The benchmark has been trading in a relatively narrow range since March.

The movement across low and higher grades were close to non-existent with 58% and 65% fines losing 0.1% apiece, settling at $37.02 and $91.50 a tonne respectively.

Analysts put the resilient performance down to optimism over the outlook for Chinese steel prices, pushing aside concerns about the potential for an escalating trade conflict between China and the United States.

Helen Lau, analyst at Argonaut Securities, told Reuters that China’s sustained measures to reduce capacity have lent support to steel prices.

“If a lot of steel capacity will be constrained in order to meet these air quality targets, then domestic steel supply will become tight,” Lau said.

Despite China and the United States introducing $US34 billion worth of tariffs on the others imports, that had little impact on Chinese commodity futures on Friday.

The September 2018 rebar contract finished trade at 3,780 yuan, just below Thursday’s night session close of 3,786 yuan.

Iron ore, coking coal and coke futures were similarly quiet, finishing trade fractionally higher at 459 yuan, 1,151.50 yuan and 2,010.5 yuan respectively.

As seen in the scoreboard below, and despite the optimism exhibited in other markets, all contracts despite coking coal fell modestly in overnight trade on Friday.

SHFE Rebar ¥3,750 , -0.53%
DCE Iron Ore ¥457.50 , 0.00%
DCE Coking Coal ¥1,154.00 , 0.52%
DCE Coke ¥2,002.50 , 0.00%

The modest movements provide little indication as to what direction spot iron ore markets may travel today.

Trade in Chinese futures will resume at 11am AEST.

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