The boomlet in iron ore prices shows no sign of flagging, thanks once again to the solid Chinese economy, but while Wall Street ended with a good gain and gold and other metals rose, oil continued to weaken.
Iron ore prices jumped to new six-and-a-half-year highs on Monday off the back of China’s continuing construction and factory expansion.
According to Metal Bulletin’s Fastmarkets, the benchmark 62% Fe fines imported into Northern China finished at $US130.17 a tonne on Monday, up 1.4% or $US180 a tonne since last Friday.
It’s the highest level since mid-January 2014 and takes the gain for 2020 to more than 41%.
Active futures trading on Monday saw shares in Rio Tinto – which is searching for a new CEO – close up 3.88% at $103.73, BHP shares climbed 1.9% to $37.24 and Fortescue shares were up 2.1% to $17.71 at the close.
So why the continuing surge – house prices are rising, demand for construction machines likewise and while profit margins for reinforcing steel are low, demand keeps the Chinese mills producing as much as it can.
The rise won’t impact the ASX Tuesday which is looking at a weak start with a 10 point decline penciled in at 7 am Sydney time after Wall Street rose on Monday.
The Dow rose 327.69 points, or 1.2%, to finish at 27,993.33, after briefly trading above the 28,000 level. The S&P 500 added 42.57 points, or 1.3%, ending at 3,383.54. The Nasdaq jumped 203.11 points, or 1.7%, to end at 11,056.65.
Last week, the Dow lost 1.7%, the S&P 500 fell 2.5% and the Nasdaq slumped 4.1%, marking its worst weekly fall since the period ended March 20. That was after a 3.3% slide the week before.
Oil fell despite a Gulf storm forcing some production cuts in oil and gas. West Texas Intermediate crude for October delivery lost 9 cents, or 0.2%, to end at $US37.24 a barrel in New York while in Europe, November Brent dropped by 22 cents, or nearly 0.6%, to settle at $US39.61 a barrel.
Metals did better on Monday.
Comex Gold was stronger with the Comex December gold contract jumping $US15.80, or 0.8%, to settle at $US1,963.70 an ounce. That was after last week’s 0.7% gain.
Comex December silver added 50 cents, or nearly 1.9%, to settle at $US27.355 an ounce after a rise of 0.5% last week.
And Comex December copper settled at $3.068 a pound, up 0.9%.