The sell off in iron ore continued over the Easter break with the price losing nearly 5% in the past four days. Overnight Monday the global spot price (according to the Steel Index) fell to $US46.70 a tonne, down 4.9% per cent from its previous close.
That’s a new record low since index-based pricing system started in 2008 and the lowest level seen since 2005-06 when miners sold iron ore under annual contract pricing contracts with Chinese and other steel mills, such as the Japanese.
The fall means iron ore has lost over 10% of its value in the past week and well over 35% so far this year.
The fall came as Wall Street shares fell, then rebounded as they shrugged off gloom about the weak jobs report for March (which is actually a bullish factor for shares).
Oil and gold prices rose as the US dollar eased, although the Aussie dollar slipped under 76 US cents.
Our market will start around flat, and it wouldn’t surprise to see it mark time until the Reserve Bank interest decision is made public at 2.30pm.
Oil futures also rose on signs of improving demand in Asia after Saudi Arabia raised its official price for Asia buyers, and changed expectations that a preliminary deal to curb Iran’s nuclear program won’t see global oil markets flooded with Iranian oil in the short term.
The S&P 500 rose 13.66 points, or 0.7%, to end at 2,080.62. The index is now up 1.1% for the year.
The Dow added 117.61 points, or 0.7%, to close at 17,880.85 after dropping more than 100 points at the start in reaction to the weak jobs data for March showing just 126,000 new jobs were created instead of the forecast 245,000.
And the Nasdaq Composite added 30.38 points, or 0.6%, to finish at 4,917.32.
The surge in oil futures saw May West Texas Intermediate futures on Nymex in New York rise $US3, or 6.1%, to close at $US52.14 a barrel. That was the highest close for a most-active contract for seven weeks on Nymex.
In London May Brent crude rose $US3.17, or 5.8%, to $US58.12 a barrel.
US bond yields rose to 1.90% as the dollar fell and talk of the Fed’s rate rise decision being delayed until the end of the year.
The US dollar fell as a result of the changed view for the Fed’s rate move.
The fall in the dollar helped Comex June gold in New York to rise $US17.70, or 1.5%, to settle at $US1,218.60 an ounce. Comex May silver added 41 cents, or 2.5%, to $US17.11 an ounce. But Comex May copper fell 2 cents to $US2.72 a pound.
