The spot iron ore price continued to rip higher on Friday, recording its second 4%-plus gain in a row.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped by 4.05%, or $2.58, to $66.24 a tonne, leaving the two day percentage increase at 8.4%.
Demonstrating the enormous level of volatility seen of late, for the week the price still fell by 0.13%.
Year to date it has now risen 52%.
Helping to explain the scale of the iron ore rally seen since the beginning of the year, activity levels across China’s steel industry expanded strongly in April after contracting for 18 months straight prior.
The National Bureau of Statistics steel industry PMI jumped by 7.6 points to 57.3, marking the first expansion in activity level seen since late 2014.
The index measures changes in activity levels from one month to the next. Anything above 50 signals growth, while anything below that level means contraction -— so the higher the number the better.
Like the headline index, the internals of the report were also strong.
Output jumped 10.6 points to 60.4 while inventories of finished goods slid 2.8 points to 34.9. Essentially, even with the surge in output seen in April, inventory levels continued to dwindle.
The survey’s forward looking indicators were also bullish with the new orders subindex rocketing to 65.6, up 12.3 points on one month earlier. Just five months ago the index was languishing at 29.7. Quite a recovery in such a short period of time.
While the news over the weekend was unilaterally bullish, iron ore markets — be they spot or futures — won’t have the chance to react to the news with China and Singapore both off for the May Day holiday on Monday.