• Iron ore prices rose on Thursday, led by strong gains in lower and mid-tier grades.
• Speculation over increased infrastructure investment in China next year was said to be a factor, helping to support steel prices during the session.
• China will release major economic data at 1pm AEDT.

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Iron ore spot markets rose across the board on Thursday, lead by strong gains in lower and mid-tier grades.

According to Metal Bulletin, the price for benchmark 62% fines jumped 1.4% to $67.65 a tonne, adding to the 1.2% gain seen on Wednesday.

The benchmark now sits at the highest level since November 23.

58% fines rose more than the benchmark, surging 1.9% to $43.21 a tonne. In contrast, the price for 65% fines increased by only 0.1%, settling at $83.50 a tonne.

The across-the-board gains were helped by strength in Chinese steel markets on Thursday.

According to Reuters, citing Chinese state media, speculation that China could launch more infrastructure projects next year was the catalyst behind the move.

China’s State Council stated that new infrastructure projects should focus on the construction of roads and waterways, helping to boost steel prices during the session.

“There is this expectation of Chinese government stimulating more growth in 2019 just after the Chinese New Year,” Darren Toh, steel and iron ore data scientist at Tivlon Technologies, told Reuters.

Chinese steel futures gained on the reports, helping to drag bulk commodity contracts higher as a consequence.

That move continued in overnight trade on Thursday.

SHFE Hot Rolled Coil ¥3,755 , 0.78%
SHFE Rebar ¥3,741 , 1.16%
DCE Iron Ore ¥513.50 , 0.49%
DCE Coking Coal ¥1,430.50 , -0.24%
DCE Coke ¥2,415.00 , 0.88%

The January 2019 hot-rolled coil and rebar contracts both finished well above Wednesday’s night session close of 3,693 and 3,671 yuan respectively.

Iron ore, coking coal and coke futures also inched higher from 512, 1,436 and 2,391 yuan respectively from Wednesday evening.

Trade in Chinese commodity futures will resume at midday AEDT, one hour before the release of major Chinese economic data, including industrial output and urban fixed asset investment figures for November.

Output is expected to have grown 5.9% from a year earlier, unchanged from the level seen in October. Fixed asset investment between January to November is tipped to increase by 5.8% compared to the same period in 2017. In October, it grew by 5.7% year-on-year year-to-date.

Both releases carry the potential to generate short-term volatility in Chinese commodity markets.

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