The spot iron ore price snapped its seven session losing streak on Friday, rising close to 2%.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped $1.05 to $54.80, marking the first increase since March 21. Despite the recent weakness, the price has still rallied 25.8% year to date.
Analysts at Metal Bulletin note Friday’s increase corresponded with news that operating conditions across China’s steel sector have stabilised following a significant period of weakness in recent years.
“China’s steel PMI rose for a fourth consecutive month in March to hit 49.7 points, up 0.7 points from that in February, according to data released by the China Federation of Logistics & Purchase,” said Metal Bulletin. “This is the highest the index has been since May 2014.”
Pointing to the likelihood that Friday’s increase will continue into a second consecutive session, Chinese iron ore futures continued to push higher heading into the weekend.
The most actively traded September 2016 contract on the Dalian Commodities Exchange rose by 8 yuan to 386.5 yuan on Saturday morning, suggesting a further gain in the spot price should the gain be sustained or built upon today.
Chinese futures will resume trade on Tuesday following a market holiday on Monday.