Daily iron ore price update (the long calm)

Yesterday’s iron ore price rose slightly to $136, 12 month swaps fell slightly to $116.94:

Rebar average rose a bit to 3536:

Not much news but I wanted to quickly observe just how long and spooky this period of calm pricing has bee. Here’s a longer term chart of spot and swap:

There is no other period when prices were so tightly range bound for so long. I suspect it’s a function of three things:

strong Chinese demand
reduced Chinese stockpiles
readily available supply dripped into the market by the Pilbara cartel

Makes sense to me and will continue so long as ore isn’t piling up on Australian docks, the Chinese don’t resume hoarding too aggressively and demand holds up.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.