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Believe it or not, iron ore is now in a bull market

Photo by Mark Kolbe/Getty Images

The iron ore price continued to climb on Tuesday, hitting a fresh three-month high in the process.

According to data provided by Metal Bulletin, the spot price for benchmark 62% fines rose by a further 1.12%, or 52 cents, to $46.78 a tonne.

The increase, following Monday’s near 6% surge, left the price at the highest level seen since November 16.

From December 11, its all time record low of $38.30 a tonne, the price has now rallied by more than 22%.

A dictionary-definition bull market is when prices rise 20%. So, technically speaking, iron ore has crossed into a bull market.

However, look at the longer term chart:

There’s nothing bullish about that, and it shows the folly of strictly calling bull and bear markets according to 20% movements off a certain point.

Suggesting that the gains in the spot price may continue today, Chinese iron ore futures continued to climb higher in overnight trade.

The most actively traded May 2016 contract on the Dalian Commodities Exchange rose by a further 0.74% to 341.5 yuan. If sustained or built upon today, it points to the likelihood of another gain in the spot price arriving later on this evening.

Trade in Dalian will resume at 12pm AEDT.

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