Just as Australia's government sets a sombre forecast for iron ore, futures prices go nuts

Photo by Bradley Kanaris/Getty Images

Australia’s budget deficit might be already on the way to reducing on the very day that a blowout of billions was revealed today in the Mid-Year Economic and Fiscal Outlook.

Well, if you place much faith in the the price action in Chinese iron ore futures.

For a second consecutive day they’re rallying hard, suggesting another hefty rise in the spot price later tonight when it is fixed later this evening.

At the mid session break, front-month futures on the Dalian Commodities Exchange – most aligned with the likely movement in spot prices – are currently up 3.83% at 312 yuan, extending the gains seen in overnight trade.

The most actively traded May 2016 contract is also pushing higher, rallying 1.39% to 292.5 yuan.

Trade in Dalian will resume at 4pm AEDT, with spot pricing from Metal Bulletin to follow suit at 10pm AEDT.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.