Money Iron ore markets are ignoring the wild swings in Chinese financial markets

05:36  04 july  2018
05:36  04 july  2018 Source:   businessinsider.com.au

Iron ore snaps its losing streak -- and it looks like there's more gains to come

  Iron ore snaps its losing streak -- and it looks like there's more gains to come Iron ore spot markets rebounded modestly on Friday following several days of losses. 

Nev Power, CEO at Fortescue Metals Group, wants to quash the wild swings in iron ore prices. Power also cited ballooning Chinese iron ore port inventories as another factor that has amplified speculative activity in futures markets .

With massive volumes of iron ore futures traded on the Dalian exchange, prices there virtually dictate the path for the physical market . The huge volumes make the DCE a magnet for speculative retail investors, who have triggered wild price swings and prompted regulators to impose trading curbs

Iron ore markets are quiet as both spot and futures prices moved very little on Tuesday and in overnight trade.© AAP Image/Kim ChristianIron ore markets are quiet as both spot and futures prices moved very little on Tuesday and in overnight trade. Iron ore was immune to the volatility seen in other Chinese financial markets on Tuesday.

Chinese futures were quiet, as were spot markets.

According to Metal Bulletin, the spot price for benchmark 62% fines rose by a solitary cent to $64.55 a tonne, a move that is generally only reserved for days when Chinese holidays are held.

a close up of a map© Provided by Business Insider Inc The movements elsewhere were also incredibly muted.

The price of 58% fines added three cents to $37.45 a tonne while 65% fines lost 0.1% to close at $91.50 a tonne.

Iron ore inches higher as Chinese inventories fall

  Iron ore inches higher as Chinese inventories fall Iron ore spot markets inched higher to start the week, adding to the gains seen on Friday.  Iron ore spot markets inched higher to start the week, adding to the gains seen on Friday.

The strong liquidity in China 's markets is a strength in its bid to be a price setter. But the huge volumes also make China 's iron ore contract a magnet for speculative retail investors, who have triggered wild price swings and prompted regulators to impose trading curbs over the past two years.

Finance . Markets Retail Your Money Markets Insider. Certainly the swings in iron ore futures have been wild of late, suggesting that speculative forces may be building, as was case in the stock market back in late 2014.

Those moves mirrored a quiet session for Chinese rebar and iron ore futures.

Rebar futures in Shanghai finished at 3,753 yuan, down one yuan from Monday's night session close.

Iron ore futures traded separately in Dalian were also quiet, slipping 1.5 yuan from the night session close to finish at 463 yuan.

Coking coal and coke futures were equally subdued. The former inched lower, closing at 1,165 yuan. The latter bucked the broader trend, closing at 2,036 yuan.

As seen in the scoreboard below, there was little movement on those levels in overnight trade.

SHFE Rebar¥3,769,0.56%
DCE Iron Ore¥461.00,-0.65%
DCE Coking Coal¥1,159.00,-0.43%
DCE Coke¥2,027.50,0.02%

Rebar futures rose but the bulks fell.

The lack of movement provides few clues as to what direction spot markets will move today.

Trade in Chinese futures will resume at 11am AEST.

Iron ore catches a bid as steel prices surge again .
Iron ore prices rose on Thursday, supported by continued strength in steel prices and an improvement in investor risk appetite. Analysts suggest steel prices are being supported by both supply and demand factors at present.According to Metal Bulletin, the price for benchmark 62% fines jumped 1.1% to $64.06 a tonne, the largest increase since June 26.

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