Futures surge injects strength into iron ore market

20 Mar 2017

Iron ore prices in the physical market received a strong boost from surging futures on Wednesday March 15.

Key drivers China’s ferrous futures logged big gains during the day, with iron ore contracts taking the lead. The most-traded May iron ore contract gained 5.5%, while the September contract, which is set to take over as the benchmark contract judging by its trading volume, even closed at the upper limit of 8%. In the spot steel market, the weathervane price of billet in Tangshan also soared 70 yuan ($10) per tonne on Wednesday. Buying activity picked up for iron ore at Chinese ports, with prices reported to be significantly higher than a day earlier. Some stockists even refused to sell, according to sources. However, a source in the procurement department of a mill in east China told Metal Bulletin that he thought prices had risen too high, making port materials unaffordable. Port inventories of Super Special fines are declining, which indicates good reception for the lower-grade product.

Source – metalbulletin