Iron ore spot markets sprung back to life on Wednesday, ripping higher upon the resumption of trade following a four-day long weekend in China.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped 2.63% to $81.54 a tonne, its largest one day percentage increase since March 15.
Year to date it has risen 3.4%.
Higher grade ores outperformed lower grade ores, perhaps as a result of a continued rally in coking coal prices which surged higher for a third consecutive session.
Despite the rally in spot and futures markets registered on Wednesday, analysts at Metal Bulletin note that it was not driven by strength in spot rebar markets.
“China’s spot rebar prices were unchanged on Wednesday, despite gains in the futures and billet markets,” Metal Bulletin said. “The higher futures and billet prices failed to push up the rebar spot market, amid lingering bearish sentiment.”
The group said that end-user demand picked up slightly after the Chinese holiday to mark Tomb-Sweeping Day, although stockists continued to show no interest in obtaining fresh supplies.
It also said that many market participants are still expecting steel prices to fall this month amid a lack of support from stronger demand.
In overnight trade, Chinese commodity futures finished mixed with rebar contracts weakening while iron ore and coking coal rose.
Here’s the overnight scoreboard.
SHFE Rebar ¥3,254 , -0.97%
DCE Iron Ore ¥567.00 , 0.35%
DCE Coking Coal ¥1,333.00 , 1.68%
DCE Coke ¥1,889.00 , 0.99%
Despite indicating a gain, the last traded price for coking coal and coke futures were lower than Wednesday’s day session close.
Iron ore futures, at 567 yuan, finished higher than the day session close of 559.5 yuan.
Trade in Chinese commodity futures will resume at 11am AEDT.