Seaborne iron ore prices have surged on the first trading day after the China's Tomb Sweeping Day holiday, as sentiment in the metals market is strengthening.

The Kallanish KORE 62% Fe index and KORE 65% Fe index jumped by $5.64/t and $5.57/t respectively to $103.89/dry metric tonne cfr Qingdao and $115.87/dmt cfr. The KORE 58% Fe index was boosted by $4.77/t to $93.44/dmt cfr.

Sources report that two deals of 80,000 tonnes of Mac Fines were each sold at $100.7/t and $98.8/t with a same laycan of 1-10 May. In addition, 80,000t of Newman Fines were booked at $102.6/t with a shipment of 1-10 May.

On the Dalian Commodity Exchange (DCE), the most-traded September 2024 iron ore contract gained by CNY 5/t ($0.69/t) to CNY 772/t ($106.76/t). On the Singapore Exchange, May 62% Fe futures and 65% Fe futures settled $5.91/t and $6.32/t higher, respectively, at $104.26/t and $116.63/t. The same contract for 58% Fe futures rose $2.6/t at $92.6/t.

Scrap prices increased on Monday and billet prices jumped. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta was up CNY 2/t to CNY 2,628/t. Tangshan billet rose CNY 60/t to CNY 3,340/t.

Confidence in the futures and spot markets of iron ore increased on Monday, which also led to a resumption of seaborne iron ore trading activity in the spot market. In particular, a major Chinese futures company reduced its short positions in iron ore futures by more than 4,000 lots, strengthening sentiment in the futures tradings.

The supply and demand fundamentals of iron ore basically remain at the same level as last week. However, as overseas mines passed the peak shipping season at the end of March, iron ore shipments are expected to slow down in April. The decline of China's steel inventories is still proceeding slowly, providing some room for a rebound in steel and iron ore prices.

Starting last week, China and the US shared signals to the market that relations are being restored. On 8 April, Pan Gongsheng, governor of the People's Bank of China, met with the US Treasury Secretary Janet Yellen in Beijing to exchange views the economic and financial situation, monetary policy, financial stability, sustainable finance, and international financial governance between the two countries. Coupled with the easing of the Red Sea crisis and the conflict in the Gaza area, the positive sentiment brought about by the improvement of the macro situation has contributed to the rebound of the commodity market.