The rally in iron ore is over

Photo by Jonathan Moore/Getty Images

The two day winning streak for iron ore came to an end overnight with a modest fall recorded.

According to Metal Bulletin, the spot price for benchmark 62% fines fell by 18 cents, or 0.46%, to $39.18 a tonne. It has now fallen exactly 45% year to date.

Suggesting that the weakness in spot may be reversed this evening, Chinese iron ore futures rebounded strongly in overnight trade.

The January 2016 contract on the Dalian Commodities Exchange rose by 1.14% to 309.5 yuan. Further out the curve, the May 2016 contract – now the most actively traded – jumped by an even greater margin, putting on 1.38%.

If sustained today it points to a likely bounce in the spot price this evening.

Trade in Dalian resumes at 12pm AEDT. Metal Bulletin will release its daily spot price calculation at 10pm AEDT.

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