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
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
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Speculate on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
Live prices on most popular markets