Iron Ore Price Surge May Mean Steel Market Has Hit Bottom

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Iron-ore prices jumped 4% on Monday and overnight, the biggest one-day gain since March, after data showed that China’s imports of the commodity went up last month, and Chinese steelmakers began buying ore in earnest after a weeklong national holiday.

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Market participants are debating whether prices have bottomed or the move reflects a short-lived recovery in a continued downturn. Demand for iron ore, a key ingredient in steel, also provides clues to the strength of China’s slowing economy.

Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.77) and a low price of CNY 830.00 ($135.14) per dry metric ton. For the fifth consecutive day, the price of Chinese HRC held flat at CNY 3,030 ($493.34) per metric ton. The price of Chinese coking coal saw essentially no change for the fifth day in a row, remaining around CNY 1,390 ($226.32) per metric ton.

Helping brighten investor sentiment was data showing China’s overall exports rose more than forecast and imports unexpectedly gained in September.

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For the fifth day in a row, the steel billet cash price remained essentially flat on the LME at $450.00 per metric ton. The steel billet 3-month price continues hovering around $455.00 per metric ton on the LME for the fifth day in a row.

The US HRC futures contract 3-month price held steady around $624.00 per short ton. The spot price of the US HRC futures contract saw little movement yesterday, closing out around $640.00 per short ton.

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