Iron ore prices jumped to new highs, fueled by structural contradictions in supply and shortages of mid- to high-quality products.
“Even low-grade varieties with 56.7% iron cost over RMB 1,200 per tonne, which is more than the best-selling futures contract,” Zhuo added.
Iron ore futures on the Dalian Mercantile Exchange for September delivery closed 4.3% higher at 1,145 yuan. The contract previously jumped 6.3%.
According to Fastmarkets MB, the 62% Fe benchmark imported into North China (CFR Qingdao) changed hands on Tuesday at $ 193.58 a tonne, up 3.93% from Friday.
Brazil's high Fe (65% Fe) index also rose to a record $ 226.90 / t.
Chinese steel futures also closed at an all-time high, boosted by strong demand and concerns about a cut in production.
Northwest Shaanxi Province recently called on local departments, at the request of the Chinese state planner and other authorities, to check the local crude steel production in 2020 and explain those whose production exceeds or does not meet the established capacity.
Another major steel city, Handan, in Hebei province, recently issued a notice asking mills to take production control measures in the second quarter.
These measures have raised concerns about new restrictions on the iron and steel industry, which led to higher prices as demand is still strong during the peak season.
The most active construction rebar on the Shanghai Futures Exchange for October delivery rose 4.3% to 5,475 yuan ($ 843.63) a tonne. It closed 2.3% higher at 5,371 yuan.
Major iron ore producers Rio Tinto, BHP and Vale released disappointing production data last week. A weaker dollar makes goods traded in that currency cheaper.
Aluminum is rallying and copper has jumped to a 10-year high as commodities approach the highs of the latest supercycle. Metals are benefiting as the world's largest economies announce stimulus programs and climate commitments as they recover from the coronavirus shock.
"Biden's new climate pledges and, at least verbally, China's greener domestic policies keep the demand picture bright," Ty Wong, head of metals derivatives trading at BMO Capital Markets.
