Excellent news. And so Atlas Iron will continue to pay off their debt even quicker.
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Iron ore's relentless move higher shifted up a gear
Iron ore’s relentless move higher just keeps on keeping on with both spot and futures prices surging yet again on Tuesday.
And it looks like there are further gains to come.
According to Metal Bulletin, the spot price for benchmark 62% fines jumped by a further 1.29%, extending its gains in 2016 to 56.8%.
Since October 10, less than a month ago, it has added 22.3% alone.
Analysts at Metal Bulletin put the continued gains down to continued steel production curbs in the Chinese city of Tangshan, initiated last week following extreme pollution in northern parts of the country.
“China’s spot rebar prices continued to move higher today following the implementation of steel production curbs in Tangshan,” it said.
“Tangshan city government ordered all steel mills in the city to reduce emissions by cutting production, which pushed up billet and rebar prices on the spot market.”
Separately, analysts at the Steel Index took a slightly different stance, suggesting the move was due to enormous gains in coking coal prices which lifted prices for a variety of bulk commodities, including iron ore.
“Ferrous markets were buoyant again today, with the rapid increases in the coking coal markets feeding through the entire complex,” it said.
Certainly Dalian iron ore futures were buoyant during the session, helping to underpin gains in spot and physical markets.
Last week, analysts at Goldman Sachs suggested that weakness in the Chinese yuan, along with a lack of US dollar denominated assets to invest in within China, was responsible for as much as 60% of the rally in iron ore prices seen in October.
The yuan, yet again, traded weaker on Tuesday against the US dollar, adding credence to Goldman’s view.
Whatever the reason behind the rally, based off the price action in Chinese iron ore futures overnight, it looks set to continue yet again on Wednesday.
The January 2017 contract on the Dalian Commodities Exchange surged by 4.42%, closing the session at 543.5 yuan.
It now sits at the highest level seen since mid-November last year.
Trade in Dalian will resume at midday AEST, just 30 minutes before the release of Chinese CPI and PPI figures for October.
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