The commodity complex is underpinned on a weak dollar and the prospects of a return to inflation in a post-covid-world.
Overnight, the Jan Dalian contract jumped to a fresh high, up 2.1% while the Dec SGX contract hit a fresh contract high of $124.06. The 62% MySteel index rose $1.45 to $126.80.
In trade today, Dalian is up more than 2%.
”Finally note that iron ore hit 2-month highs, helped by super-hot Chinese steel demand. Steel prices in China have continued rising strongly post the National Day/ Golden Week holidays early October. Rebar is up 11% since the beginning of October while hot rolled steel prices have risen to 2yr highs and cold rolled prices are approaching 9yr highs,” analysts at Westpac explained.
Overall, news that the Pfizer/ BioNTech vaccine was heading for emergency approval in the US and EU lifted markets and would be expected to support oil in the coming days.
The EIA confirmed another rise in crude inventory, at 769kb, but was not as large as expected and refinery run rates increased by 2.9%.
However, the suggestions that the ‘jury is still out’ on supply cut extension from Saudi Energy Minister bin Salman have so far been ignored.