Iron ore spot markets surged higher for the second time in three sessions on Tuesday with strong gains recorded across all grades.
However, with futures continuing to weaken overnight, it’s uncertain as to whether the rally will continue today.
According to Metal Bulletin, the price of benchmark 62% fines jumped 3.5% to $71.25, leaving it within touching distance of the three-month high of $72.68 struck last week.
Ore with 65% Fe content rose by a smaller 1.4%, finishing at $87.10 a tonne. 58% fines rose by a similar margin, adding 1.8% to $39.70 a tonne.
Interestingly, the strength in spot markets came despite a modest reversal in Chinese rebar and iron ore futures during Tuesday’s day session.
The May 2018 rebar contract in Shanghai closed down 0.84% at 3,884 yuan a tonne, well below the 3,937 yuan level it finished Monday’s night session.
Iron ore futures in Dalian followed a similar path, sliding 0.98% to 503 yuan a tonne. That too was below the 513 yuan level it closed the previous session.
And, as seen in the scoreboard from Tuesday’s night session, those moves extended in overnight trade.
SHFE Rebar ¥3,841 , -2.14%
DCE Iron Ore ¥498.50 , -0.80%
DCE Coking Coal ¥1,287.00 , 0.59%
DCE Coke ¥2,081.50 , -1.35%
Given the continued slide in futures, it provides an early indication that spot markets may do the same today.
Trade in all contracts will resume at midday AEST.