- Iron ore spot markets rose on Monday, supported by strength in steel prices.
- Officials in the Chinese city of Tangshan — a major industrial hub — have ordered steel mills to reduce output levels even further over the next six weeks.
- Chinese steel and bulk commodity futures were near-static in overnight trade.
Iron ore spot markets rose across the board on Monday, supported by continued strength in Chinese steel prices.
According to Metal Bulletin, the price for benchmark 62% fines rose 0.9% to $65.75 a tonne, extending its rally from the lows struck in early July to 4.1%.
It now sits at the highest level since June 26.
Solid gains were also recorded across lower and higher grades on Monday.
The price of 58% fines added 0.7% to settle at $38.43 a tonne, while 65% rose by a smaller 0.5% to $92.20 a tonne.
The gains coincided with continued strength in Chinese steel futures, helped by further production cuts in Tangshan, an industrial hub in the northern province of Hebei.
After soaring 4.7% last week, rebar futures in Shanghai continued to gain on Monday, finishing trade at 4,011 yuan, up from Friday’s night session close of 3,974 yuan.
Hot-rolled coil futures were also bid, climbing 1% to close at 4,080 yuan.
Steel mills in Tangshan were ordered to make even deeper cuts to output levels from July 20 until August 31 in an attempt to further improve air quality amidst stifling summer conditions.
The strength in steel markets helped to support bulk commodity futures in Dalian with the most actively-traded iron ore, coking coal and coke contracts finishing trade at 475, 1,168 and 2,100 yuan respectively.
They closed Friday’s night session at 471, 1,161 and 2,065 yuan respectively.
As seen in the scoreboard below, there was very little movement upon those closing levels in overnight trade on Monday.
SHFE Rebar ¥4,012 , 0.38%
DCE Iron Ore ¥475.00 , 0.32%
DCE Coking Coal ¥1,163.50 , 0.00%
DCE Coke ¥2,101.00 , 1.18%
Given the lack of movement, it provides few clues as to what direction spot markets are likely to move on Tuesday.
Trade will get underway at 11am AEST.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.