Another massive surge in iron ore prices occurred on Monday, bringing the total gain since China began announcing stimulus measures last Tuesday to over 20%.
The price of 62% Fe fines surged to a day’s high of more than $113.50 per tonne—the highest since May—before easing in late afternoon trading to close at $108.90 per tonne.
From today, the market will largely go quiet as China observes a seven-day holiday break.
Monday’s surge mirrored a similar performance by Chinese stock markets, with the key index, the CSI 300, jumping more than 8% a day ahead of the holiday.
This increase came as the federal government’s resource forecasting group predicted a significant decline in exports—around $40 billion—due to lower iron ore, coal, LNG, and oil prices over the next two years.
The Department of Resources’ September quarterly report noted that “volatility” in iron ore prices caused them to fall to two-year lows in August, leaving them down by a third since the start of 2024. The two-year low of $89.46 on the SGX was reached on the final day of August. As of Monday’s close, the price was up 21%.
SGX Premium Australian coking coal hit a low of $183 per tonne on September 6 and traded 30% higher at $239 per tonne at Monday’s close.
Encouragingly, the monthly activity survey in the Chinese steel industry jumped to a reading of 49 in September, up from 40 in August, as demand and prices firmed and more capacity returned to production.
The Mysteel website reported that the composite Chinese steel price rose by $16.40 per tonne in September, with most of the improvement occurring in the past week.
Rebar futures (the futures price of reinforcing bar, a key steel product in housing and construction) surged by 400 yuan per tonne since last Tuesday, an increase of more than 13%. The price settled at 3,417 yuan per tonne on Monday, marking a three-month high ahead of the holiday.
The price surge contributed to another round of solid gains for iron ore miners on Monday.
BHP shares were up 2.7% on Monday, bringing their rise over the past week to nearly 15%. Rio Tinto shares increased by 1.3%, up 14.5% over the past five sessions, while Fortescue shares jumped 2.9% on Monday, totaling over 15.5% for the week.
Mineral Resources shares rose by 5.9%, up more than 40% for the week. Whitehaven Coal shares climbed nearly 1.8% on the day, now up more than 18%.
