It’s been a busy night overnight with iron ore rising a massive 18.5% on the belief (ie nothing fundamental) that Beijing’s pro-growth policies will improve demand in China. Other commentary also refers to the catching out of short sellers, who in a rising market are panicked into buying back and canceling out a prior sell contract. Adding to the confusion, China recently reduced its annual growth target to 6.5 percent until 2020, down on prior targets of 7.5 to 8 percent.
Copper and Aluminium have also benefited from the increased sentiment, be it not a 18.5% increase overnight, but rather 1.6% for copper and 0.8% for Aluminium.
One downside in the rising Iron ore price has been the rise in the AUD/USD which is currently trading at a 9 month high of 74.70 compared to 71.40 last week.
DJ Copper Closes At $5,000/Ton in Europe
By Ese Erheriene
LONDON–Copper prices settled around $5,000 a metric ton for the second consecutive session in London on Monday, as market skepticism set in over whether top consumer China can reduce its oversupply in industrial metals.
The London Metal Exchange’s three-month copper contract closed down 0.5% at $5,000 a ton at the PM kerb close, having ended at $5,027.50 a ton during the previous session for the first time since last November.
On Saturday, top consumer China began its annual National People’s Congress and Beijing indicated new resolve to reduce excess capacity in industrial sectors.