Iron ore price

Iron ore price, steel price and futures published daily

The contemporary seaborne iron ore price first emerged in 2003 when the Chinese development model shifted up a gear. Indian suppliers broke free of an annual contract pricing system that had been dominated by Australia, Brazil and Japan for decades.

As Chinese demand surged, traditional supply and pricing mechanisms could not keep pace. Indian miners in Goa and Karnataka had surplus supply and filled China’s marginal new needs outside the old benchmarking system.

But it still wasn’t enough and other non-traditional suppliers began to emerge in South America and Africa. These needed more dynamic pricing mechanisms and by 2008 Platts, Metal Bulletin and The Steel Index were publishing a daily iron ore price.

As the Chinese demand surge continued, by 2007, major Australian iron ore miners were charging enormous premiums to prices from five years earlier. The annual benchmarking system began to strain to the point breaking, including significant diplomatic tensions between Australia and China. This culminated in a proposed merger of BHP and RIO Tinto which triggered panic in Beijing as it feared an already supply-constrained market and soaring iron ore price would by made worse by monopoly pricing. The Chinese SOE, Chinalco, moved the buy a blocking stake in RIO Tinto.

However, the GFC intervened and deflated tensions as Chinese demand collapsed. But Chinese steel mills found themselves still tied to very high prices and an annual iron ore price benchmark that did not reflect the new reality. Many defaulted on cargoes and walked away from deals.

To fight the downturn, China unleashed an enormous fiscal and monetary stimulus that soon had China building more than ever. The demand for iron ore rocketed to all new highs. With the memory of contract defaults fresh in their minds, major Australian miners, led by BHP and CEO Marius Kloppers, abandoned the annual benchmarks, forcing Chinese steel mills to adopt a short term iron ore price using spot and quarterly contracts. Brazil joined in in 2010.

The spot iron ore price soared to all new highs and triggered a global wave of new supply from producers such as Fortescue Metals Group, Ferrexpo, Kumba Iron Ore, Anglo American and Sino Iron.

With the rise of the short term iron ore price market, iron ore derivative markets grew. First in the Singapore on the SGX and later in China as the Dalian Commodities Exchange and the United States at Chicago Commodities Exchange (CME). Iron ore derivatives could hedge and future price iron ore output.

These last developments coincided with the peak in the China boom and prices began to fall from 2012. After peaking above $190 per tonne, the iron ore price collapsed into the $30s in 2015 as new supply outstripped demand.

Ahead were still many years of oversupply, a lower iron ore price, consolidation and mine closures.

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Daily iron ore price update (steel cuts)

The iron ore complex begun the week much stronger with moves up across the board, but particularly futures as rebar just treaded water:   http://www.theage.com.au/business/mining-and-resources/dalian-iron-ore-surges-8pc-shanghai-rebar-climbs-7pc-20170110-gtp602 So what’s moving this price higher and faster? (better? stronger?) Basically its speculative steel futures getting pushed around by official junctures to reduce capacity as huge smog problems and older mills

2

Daily iron ore price update

by Chris Becker Here are the latest iron ore and other commodity prices with the new year heralding a pullback: Port stocks hit a new record high as we noted yesterday and iron ore faces some bigger challenges this year, namely another supply surge. From Bloomberg: Seaborne supply is expected to remain strong on shipments

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Daily iron ore price update (splat)

Iron ore price charts for December 22,2016:     The dream is over. Spot splatted though Tianjin benchmark is bit better -2.8% to $77.10. Paper fell more overnight and DCE looks ready to roll big. SGX is following. Steel fading. I have no idea why thermal is up but it’s not going to last. Coking is still

2

Stocks dodge the building China bond syndrome

Chinese bonds are bid a little today: And Dalian is flat: Under the surface, trouble still lurks, via Bloomie: Here’s another Chinese financial practice that’s prompting high-decibel warnings. So-called entrusted bond holdings are a way for financial institutions to skirt rules on using borrowed money to invest in bonds. How? By getting a third party

2

Chinese steel sentiment still very strong

From Macquarie:  Sentiment towards China’s steel market remains strong, as shown by our latest proprietary China steel survey. Steel mills reported a continued increase in their order volumes thanks to strong demand from auto, machinery and infrastructure sectors. Their capacity utilisation rate remained stable despite better profit margins, most likely influenced by recent environmental-related

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Daily iron ore price update (painful)

Iron ore charts for December 21, 2016: Spot down. DCE paper down overnight. Steel down. Coal still dead cat bouncing. It’s trying to deflate but given the array of headwinds it is painfully slow. Tianjin port is shut owing to smog. Some support is coming from Cyclone Yvette: But, even so, one wonders how much

4

Big Iron sees light of hope in rising Chinese bond-fire

The Chinese bond-fire is rising again today and it is clearly a mini-crisis that could develop swiftly: Dalian is working it out: But not Big Iron. It sees hope in that fire! BHP is 1.3%, RIO 1.4%, FMG 1% and WHC 3%: Minor falls and broker upgrades must mean buy! Big Gas is fading too: Big

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World steel output rebounds

From the World Steel Association: World crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was 132.4 million tonnes (Mt) in November 2016, 5.0% up on November 2015. China’s crude steel production for November 2016 was 66.3 Mt, an increase of 5.0% compared to November 2015. Elsewhere in Asia, Japan

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Dirt dumped, banks bought

Dalian has opened under pressure again: As Chinese bonds keep selling: And authorities are warning that liquidity will remain tight through the Q1 lending season: Tight liquidity in the interbank market is expected to continue until early February It recommends monetary authorities take steps to prevent the situation from getting worse Liquidity is forecast to get