The iron ore rally just keeps on keeping on, seemingly adding to gains each day.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by a further 0.66% to $64.38 a tonne on Monday, leaving it at the highest level seen since April 29.
Since the conclusion of Golden Week holidays in China in early October, the price has now gained 15.3%, extending the rally so far this year to 47.8%.
The strength in the benchmark price flowed through to both higher and lower grade ores, particularly the latter, with the spot price for 58% fines jumping 53 cents to $48.76 a tonne.
According to Metal Bulletin, the continued rally followed news of another strong profit result from a major Chinese steel producer.
“State-owned Wuhan Iron & Steel (Wugang) returned to the black in the first nine months of 2016,” said the group.
“The mill recorded a net profit of 370.28 million yuan ($US54.59 million) for the January-September period, compared with a net loss of 1 billion yuan ($US147 million) a year earlier, according to its latest financial report.”
That followed another strong profit result from Chinese steel giant Baosteel early last week, something that helped spark a rally in steel prices along with its raw ingredients, including iron ore.
Providing no real indication as to whether the rally in spot markets will continue on Tuesday, Chinese iron ore futures trimmed their gains in overnight trade, closing up 1.21% at 500.5 yuan.
While pointing to an increase, it was actually lower than where futures finished Monday’s day session.
Trade in Chinese commodity futures will resume at Midday AEDT, just as the Chinese government releases manufacturing PMI figures for October.
A separate steel industry PMI will also be released at this time, and is often influential on movements in Chinese futures.