And with China up, it’s no surprise that iron ore prices rebounded as well on Friday night – adding to the upbeat outlook for the local market this week.
The gains on Thursday and Friday went some way to offsetting the sell-off earlier in the week.
Iron ore jumped 3.3% on Friday to within sight of the $US50 a tonne mark at $US49.90 a tonne, according to The Steel Index.
It climbed 9.5% on Thursday after plunging 11.3% on Wednesday (when the Chinese rout was at its worst).
Reuters reported that the price swings marked the biggest single-day drop and rise for the spot benchmark since TSI began tracking prices in late 2008, as iron ore, along with other commodities, moved in tandem with Chinese shares.
In fact, iron ore was the hardest hit industrial commodity in last week’s sell-off, pushing it back to a bear market as sellers latched on to the panic that gripped Chinese equities.
Also hit hard were copper and oil – two other major commodities dominated by Chinese demand.
So far as leading iron ore miners are concerned Rio Tinto closed last week on Friday at $52.07, up 2.3% on the day but down 0.8% for the week. BHP Billiton shares jumped 3% on Friday to end the week on $26.65. That left it 0.2% higher for the week which wasn’t a bad result given the sell-off in copper and oil as well.
And Fortescue Metals Group closed at $1.81 on Friday, down 0.27% for the week and 21.07% over the past four weeks.
For the week, iron ore lost 7.8%, after dropping 10.9% last week.
Iron ore fell as far as $44.10 a tonne last week, the lowest on record since TSI began compiling the data.
And Goldman Sachs said, that based on the annual contract pricing method (that preceded the current spot-based system), it was the lowest since 2005.
