Iron ore markets are nothing short of erratic

Don Arnold/Getty ImagesIron ore traders.
  • Iron ore spot markets remain erratic, trading mixed across the grades on Tuesday.
  • Chinese new home prices surged 1% in June, coinciding with steep losses in Chinese stocks earlier in the year.
  • Chinese commodity futures delivered largely meaningless moves in overnight trade.

Iron ore spot markets remain erratic, trading mixed across the grades on Tuesday.

In reality, the moves largely reversed those seen a session earlier, continuing the choppy price action that’s now been in place for several months.

The spot price for benchmark 62% fines fell 0.8% to $64.07 a tonne, according to Metal Bulletin, giving back similar gains achieved a session earlier.

For all the wild price movements seen recently, the benchmark remains near the bottom of the trading range it’s been stuck in since late March.

After getting thumped a day earlier, lower grade ore subsequently ripped higher on Tuesday, surging 2.8% to $37.65 a tonne. It fell 2.2% on Monday.

Higher grade ores managed to buck the wild gyrations seen elsewhere with 65% fines adding 0.1% to $91.20 a tonne.

The rebound across lower grades coincided with another decline in Chinese steel prices, adding to the losses seen earlier in the week.

Rebar futures in Shanghai traded down as much as 1.7% at one point during the session before recovering to finish at 3,941 yuan, up marginally from Monday’s night session close of 3,930 yuan.

Mirroring the movements in rebar contracts, iron ore, coking coal and coke futures in Dalian all finished well off their session lows, closing at 465, 1,148 and 2,012 yuan respectively. All were fractionally higher than Monday’s night session close.

The turnaround in sentiment may have been helped by news that Chinese new home prices increased by 1% in June, according to China’s National Bureau of Statistics (NBS), the largest increase since October 2016.

Prices also increased in 63 of the 70 cities monitored, up from 61 in May, coinciding with steep losses in Chinese stocks since late January this year.

While supportive on the outlook for residential construction, it also increases the risk that policymakers will enact even stricter rules governing home buying and selling.

Providing few clues as to what direction spot markets may travel today, Chinese steel and bulk commodity futures did very little during Tuesday’s night session.

Here’s the closing scoreboard.

SHFE Rebar ¥3,942 , 0.41%
DCE Iron Ore ¥467.00 , 0.65%
DCE Coking Coal ¥1,144.00 , 0.35%
DCE Coke ¥2,014.50 , 0.93%

Trade in all Chinese commodity futures contracts will resume at 11am AEST.

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