Sharemarket futures failed to react overnight Monday to a surge in the spot price of ion ore.
The Australian dollar steadied above 90 US cents though, but that was more due to an easing in the value of the US currency.
The spot price of iron ore jumped by 3.9% overnight amid reports of higher Chinese buying.
The local stockmarket will start with small single digit gains this morning after yesterday’s 1% slide.
Allied with the 4% fall in the value of the Aussie dollar last week, local iron ore exporters have received a small boost, but the gains will have to be sustained for the next few months to have any lasting gain.
The rise, if it continues, will help Arrium in its right issue to shareholders, announced yesterday which looks like an insurance policy during the period of low global prices.
Offsetting the improvement in iron ore were losses in Brent crude oil and copper – which dropped to a three month low of around $US3.08 a pound in New York.
Iron ore for immediate delivery to the port of Tianjin in northern China traded around $US85.20 a tonne, up from last week’s five-year low of $US81.90 and 3.9% above th $US82.00 closing mark on Friday night.
The iron ore and forex market moves offered support for Rio Tinto’s shares in London overnight trade which closed 1%. But BHP shares fell 0.4%, so the impact wasn’t all that great.
Comex copper futures fell to three month lows, thanks to the weak economic news from China on the weekend.
Copper futures for December delivery, fell US2.10c, or 0.7% to $US3.0855 a pound, the lowest settlement since mid-June.
And while the key US oil futures contract, October West Texas Intermediate, rose US65c to finish at $US92.92 a barrel, recovering from the seven month low reached last Friday.
But the futures price for October Brent North Sea crude lost US46c to settle at $US96.65 a barrel, the lowest level futures price since late June 2012.
