Iron ore futures surged by 19% -Biggest Rise since Started 2009

Iron ore and steel futures have surged today on hopes for further stimulus in China and an improving economic outlook.

Prices for physical delivery of iron ore to China rose 19 per cent to $63.74 a tonne on Monday, according to Metal Bulletin, marking the biggest one-day rise since the index started in 2009

Iron ore futures on the Dalian Commodity Exchange closed up 4.9 per cent to their highest level since June, while steel rebar futures on the Shanghai Futures Exchange rose 5 per cent, hitting their daily limit under exchange rules.

A rally in metal prices and mining stocks has raised hopes that commodity prices may have bottomed and that China’s economy is improving. China said at its annual meeting of its national legislature that it would seek growth of 6.5 per cent for the next five years.

“Continued focus on reforming the economy, accompanied by measures supporting growth would be the most bullish outcome for metals,” Bank of America Merrill Lynch analysts said.

Still, Goldman Sachs said that it expected the rally to be short-lived “in the absence of a material increase in Chinese steel demand.”