- Iron ore spot markets rose modestly for a second consecutive session on Wednesday.
- Authorities in Tangshan, China’s top steel making city, announced an extension to production curbs on heavy industry previously implemented over summer.
- Iron ore futures closed sharply higher during Wednesday’s night session, pointing to the likelihood of gains in spot markets on Thursday.
Iron ore spot markets eked out small gains on Wednesday.
And with Chinese futures up strongly in overnight trade, it looks like that form may extend into Thursday.
The spot price for benchmark 62% fines added 0.3% to settle at $66.79 a tonne, according to Metal Bulletin. 58% fines rose by a similar margin, increasing 0.4% to $37.77 a tonne. 65% fines were unchanged at $95.10 a tonne.
The second day of modest gains coincided with a bounce in Chinese steel futures in overnight trade on Tuesday, a move that fizzled out on Wednesday.
Rebar futures in Shanghai finished trade at 4,093 yuan, down from 4,115 yuan on Tuesday evening. It moved in a wide range between 4,050 and 4,127 yuan during the session, fluctuating following news that authorities in the Chinese city of Tangshan have extended production curbs on heavy industry into September.
While that helped steel futures move off the lows, it still wasn’t enough to offset persistent concerns over trade tensions between China and the United States, something that contributed to a steep selloff in Chinese stocks on Wednesday.
Despite the prospect of extended production cuts, potentially limiting demand, and uncertainty over trade, bulk commodity contracts closed mixed the session.
Iron ore futures in Dalian were unchanged at 487 yuan. Coke gave back some of its overnight gains, closing at 2,381 yuan. Coking coal bucked the trend, lifting to 1,241 yuan.
As seen in the scoreboard below, both rebar and bulk commodity futures closed higher in overnight trade, especially iron ore which closed at two-week highs.
SHFE Rebar ¥4,103 , 0.39%
DCE Iron Ore ¥494.00 , 1.54%
DCE Coking Coal ¥1,249.50 , 0.97%
DCE Coke ¥2,388.50 , -0.19%
The gains suggest spot markets will start Thursday’s session on a stronger footing.
Trade in Chinese commodity futures will resume at 11am AEST.
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