Iron ore rallies 8% in super-charged comeback after Chinese holiday
Iron ore has resumed trading on Monday after last week’s Chinese holiday and has rallied up to 8% in a matter of moments.
Iron ore futures have hit the exchange’s daily limit in China, as it trades as high as the exchange will allow.
IG market analyst, Kyle Rodda said, ‘Iron ore has continued its next leg higher today. On the back of prevailing concerns of major global disruptions in production and supply following the Vale mine collapse, the reintroduction of Chinese traders has led to the exchange hitting its daily limit at the outset of today’s trade.’
Mr. Rodda says, the surge was not only attributed to concerns over supply disruptions from Brazil following the Vale mine collapse in late January, but concerns over restocking ahead of Spring construction season in China.
The Iron Ore surge comes after Chinese commodity futures were closed last week for Lunar New Year holidays. On Monday morning, Iron ore immediately hit the exchange’s daily limit up level, meaning it traded as high as the exchange would allow and the price won't be allowed to go higher.
This is a common rule that applies for many exchanges and markets, aimed at keeping an orderly market. The price rallied nearly 8% in the matter of moments, trading one of the highest levels in nearly two years.
Iron ore share price
Strong gains have also been seen in steel, coke and coking coal contracts in early trade on Monday
At time of writing on Monday, Hot Rolled Coil is up 2.67%, Rebar is up 2.81%, Iron Ore up 7.95% and Coking Coal up 2.16% and DCE Coke up 3.13%.
Australian dollar jumps
The Australian dollar climbed on Monday in response, recovering from six-week lows.
The Australian dollar added 0.2% to $0.7100, bouncing from Friday's $0.70605
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