Benchmark Australian ore has advanced almost 8% since Christmas after prices hit a 5-and-a-half-year low of $65.60 a ton in December.
The Financial Times reported that few are convinced the rally will last. Analysts believe the bounce in prices is being driven by restocking at steel mills ahead of the Chinese new year and changes to reserve requirements for Chinese banks. With more supply set to come on line and demand in China weak, many believe prices will come under further pressure this year, even trading into the $50s.
Decreasing 1.3% made Chinese slab the biggest mover of the day, finishing at CNY 2,940 ($473.46) per metric ton on Wednesday, January 7. After remaining flat for three days, the price of Chinese HRC fell 0.3% on Wednesday to CNY 3,030 ($487.95) per metric ton. The price of Chinese coking coal remained essentially flat at CNY 1,080 ($173.92) per metric ton. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($135.27) and a low price of CNY 840.00 ($135.27) per dry metric ton.
For the fifth consecutive day, the cash price of steel billet held flat on the LME at $500.00 per metric ton. The steel billet 3-month price continues hovering around $480.00 per metric ton on the LME for the fifth day in a row.
The 3-month price of the US HRC futures contract held steady around $602.00 per short ton. The spot price of the US HRC futures contract showed little movement on Wednesday, hovering around $605.00 per short ton.