Iron ore prices for June 26, 2017: Tianjin benchmark was unchanged at $55.50. Paper is going nowhere. Other prices have yet to update. No change to outlook: down.
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Daily iron ore price update (yawn)
Primary Section
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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Find below our daily feed of market analysis
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ASX dead cat whimpers
A little bid in Dalian today: Big iron too: And Big Gas: Big Gold down a bit: Big Bubble mostly down too: And Big Liar continues to reach for the stars anyway: Because Australia is different.
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Daily iron ore price update (firm)
Iron ore price charts for June 23, 2017: Tianjin benchmark fell 50 cents to $55.50. Paper faded. Steel has not updated. CISA steel output launched early June 5.4% to 1.86mt, indicating still good demand. In news, Roy Hill is struggling: Roy Hill is expecting to complete about 16 million tonnes of iron ore shipments in
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As Australia goes ex-growth so does the ASX
Dalian continues its recent pattern of firming at night and sagging during the day today: Big Iron is mixed: Big Gas is still stinky: Big Gold is up: Big Bubble is reeling: And Big Liar is as mendacious as usual as REA breaks out: As Australia goes ex-growth so does it’s share market. Avagoodweekend.
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Chinese steel sector thumping along
Macquarie has released its monthly Chinese steel mill survey and it paints a picture of a sector in rude health: Opinions on the outlook for the steel and iron ore markets appear to have diverged in line with recent price performance. Steel mills and steel traders are more optimistic in our latest survey than
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Daily iron ore price update (supply curtailments)
Iron ore charts for June 22, 2017: Tianjin benchmark rose 1% to $56. Paper fell late and overnight. Steel has not updated. From Reuters: Iron ore exports from India were down 53 per cent in the past two months as China, a major consumer, took better quality ore from Australia to feed its integrated steel
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ASX dead cat screeches again
Dalian soft today which makes sense since its outlook is getting worse not better: But the technical action is enough to have reversed some of yesterday’s losses in Big Iron: Big Gas stinks of false hope today as it rises a little: Oil going sub-$40 in my view… Which means Big Gold is a buy
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Daily iron ore price update (bear market rally)
Iron ore price charts for June 21, 2017: Tianjin benchmark added $1 to $55.40. Paper took off overnight. Coking coal too. Steel is stuck. The bear market rally that has been trying and failing for two weeks finally gained a little traction. My guess is the trigger is the new liquidity management being undertaken by
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ASX thumped
Dalian has opened flat: Big Iron has broken with FMG right at new intraday lows, BHP crashed through them, and even coconut vendor RIO under pressure: Big Gas is now burning out of control with STO pointing straight towards new 40 year lows: Big Gold is chopping wood in its correction: Big Bubble is bursting
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Macquarie dumps dirt
The great commodity bear market rally is over, apparently, via Macquarie: After the regular liquidity pushes of 2016, the Chinese government has now shifted to a tightening bias, propagating a destock cycle through the manufacturing chain. Chinese construction activity has been extremely strong, but we also expect sequential weakness in this area. To be clear,
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Daily iron ore price update (steel fade)
Iron ore price charts for June 20, 2017: Tianjin spot fell 30 cents to $54.40. Paper was hit overnight. If that was supposed to be a bear market rally then the market is in deep trouble. Steel stable. World steel output growth is fading fast: World crude steel production for the 67 countries reporting to
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As global stocks soar, ASX crumbles
Dalian is wandering aimlessly today: Big Iron is mostly up: Big Gas is burning: Big Gold is correcting: Big Bubble has had its run seemingly: Big Liar is soldiering on: And a bonus chart today, hope your enjoying Australian exceptionalism: If not, try the MB Fund launching July 1st with a 70% international equities allocation. Sign
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Daily iron ore price update (damp squib)
Iron ore charts for June 19, 2017: Tianjin benchmark tacked on 80 cents to $54.70. Steel is stable. Coals doing better. The iron ore market is trying to give us a bear market rally as we pass through Chinese peak demand season but it’s coming off more like a damp squib. No change to the
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Big Iron bashed as sell side capitulates
Dalian is holding up today: But Big Iron is getting hit with FMG at new closing lows as Citi downgrades: There is a very long and embarrassed list of brokers to follow… Big Gas is getting a little relief: Oil has further to fall… Big Gold is off as DXY rebounds: Big Credit is up
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Citi downgrades iron ore, miners
File this one away under “driving through the rear vision mirror”: Iron Ore: The Bear is Coming — 2017 iron ore price downgraded from US$70/t to US$61/t, 2H17 price reduced from US$62/t to US$49.50/t, and 2018 by US$3/t to US$50/t. After IF shutdowns drove increased blast furnace utilization and iron ore to >US$90/t in
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Daily iron ore price update (FMG relief)
Iron ore price charts for June 18, 2017: Tianjin spot rose 20 cents to $53.90. Paper was flat overnight. Steel is firming again. We may need to see rebar roll over before iron ore takes another material leg lower. Port stocks fell 1.1mt to 138.95mt. In news there is a little relief for FMG, via
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Coking coal shreds its contracts
Via Macquarie: All change for the met coal market After initial reports a few weeks ago, further details are coming to light about the shift of the hard coking coal contract to an index-based system. IHS has reported that Nippon Steel agreed to use spot index price average over March to May for calendar
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Daily iron ore price update (yawn)
Iron ore price charts for June 15, 2017: Tianjin benchmark rose a sterling 20 cents to $53.70. Paper climbed overnight. Steel did yesterday. Who cares. From Reuters: Chinese rebar steel futures climbed 3 percent to a two-week high on Thursday after authorities said the world’s top producer has achieved 85 percent of its capacity
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ASX slammed by oil, jobs
The ASX two day boomlet has fallen over today, down 1.4% as I write. It started badly but then got worse with the good jobs number: I guess the market was sneakily readying for more rate cuts. Not yet. Meanwhile, Dalian is stable: But Big Iron is getting slammed (even coconut vendor RIO): As oil
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Daily iron ore price update (going nowhere)
Iron ore price charts for June 15, 2017: Tianjin benchmark added 50 cents to $53.50, again under-performing paper, which fell right the way back overnight. Coal firmed. Steel softened. No change to outlook: lower.
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ASX dead cat howls higher
Don’t look for rationality here. Dalian is soft: But Big Iron is mostly up: FMG is up 1% even as iron ore hits new lows. Makes no sense but the 58% discount has eased a little so not entirely crazy, either. More losses ahead. Big Gas is mixed: No upside here as oil falls with
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How low is iron ore going to go?
Deutsche has a crack at it today: Iron ore supply has responded to the more favourable pricing environment Iron ore supply has responded across all quarters after a weak first quarter from the major seaborne producers. First quarter production reports confirm that severe weather at the start of the year took its toll on the
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Daily iron ore price update (new lows)
Iron ore price charts for June 13, 2017: Tianjin benchmark was smacked to $53. Paper was weak again overnight. Steel still holding up. Coals weak. Platts has texture: A supply glut and good availability of cheaper feedstock such as scrap have been the two main depressing factors for the seaborne iron ore market lately. “There’s
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Enjoy long weekend, buy a bank
That seems to be the depth of reasoning overtaking the share market today as banks soar. After all, nothing says buy banks more than a crashing global yield curve and an even more rapidly deteriorating local economy. Booya! Go figure. Meanwhile, Dalian is OK so far: Though Big Iron is not so good following overnight
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Daily iron ore price update (ports Everest)
Iron ore price charts for June 12, 2017: Tianjin benchmark was down 20 cents over the long weekend to $54.40 (down 80 then back up 60). Paper is trying and failing rally. Steel is only correcting slowly. Coking coal remains under pressure. CISA steel output for late May fell -3% to 1.79mt and is back