Iron ore price charts for November 16, 2017: Tianjin benchmark lifted 6o cents to $61.80. The rest is range trading. In news, India is considering breaking a dam, via Reuters: India is considering scrapping or reducing a 30 percent export tax on medium-grade iron ore after building up a stubbornly high surplus of the commodity,
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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Iron ore price charts for November 15, 2017: Tianjin spot fell $1.60 to $61.20. Paper was stable overnight. Steel got whacked yesterday. CISA late October output fell 1.6% to 1.79mt per day. The decline is now showing evidence of either shutdowns or easing demand. Nothing is discounted here yet. If the market is going to
Iron ore charts for November 14, 2017: Tianjin benchmark rose 90 cents to $62.80. Paper was burned overnight. Steel is range trading. Yesterday’s China data clearly telegraphed the future of weakening demand. Real estate sales growth continues to fall at a good clip year to date: They are now falling year on year at -6.4%.
Iron ore price charts for November 13, 2018: Tianjin benchmark fell 10 cents to $61.90. Steel was firm. Paper too. Port stocks hovered at the highs last week of 137.87mt. The entire complex is trading as one at the moment. Bulks should be felling even as steel remains strong but ever time they try, speculators
Iron ore price charts for November 10, 2017: Tianjin benchmark was up 10 cents to $62. The debate is raging around the impact of shutdowns, Via Domainfax: “I think the next three to six months is going to be fascinating because never in anyone’s lifetime have we seen mandated shuts on a scale we are
Iron ore prices for November 9, 2017: Tianjin benchmark fell 60 cents to $61.90. Paper fell more overnight. Coking coal too. Steel is stuck. Port Hedland shipments in October were soft at 41mt. We appear to be range trading around Banana Man. We should already be at $50 on fundamentals so who knows where we
Iron ore price charts for November 8, 2017: Tianjin benchmark rose 20 cents to $62.50. Paper took off last night. Steel is flat. Reuters has texture: China’s iron ore imports fell nearly 23 percent in October from record levels the previous month, customs data showed on Wednesday, with steel mills in the world’s top producer
Iron ore price charts for November 7, 2017: Tianjin benchmark fell 40 cents to $62.30. Paper fell overnight. Coking coal too. Steel is stable. 42 port inventories rose 2% last week to 138.6mt. Texture from Reuters: Chinese cities have ordered their steel mills to cut output from this month through March as part of Beijing’s
Iron ore price charts for November 6, 2017: Tianjin benchmark surged 5.6% to $62.30. Paper came off overnight. Coking coal is less excited. Steel too. Me as well. This is Banana Man (Chinese retail speculators) at work. I’d fade the rally. Reuters has texture: The war on pollution was partly to blame for third quarter
Iron ore price charts for November 3, 2017: Tianjin spit listed 10 cents to $58.40. Paper rallied overnight but is stretching away from physical. Coking coal futures were firm. Steel too. Reuters has texture: Steel mills across China, particularly in the country’s biggest steel producing city of Tangshan, were expected to begin cutting production to
Via Domainfax: Evans & Partners analyst Andrew Hines said life would get progressively tougher for Fortescue in coming years, as rising energy and currency costs combined with mine depletion and persistent pricing discounts. “Over the past four years Fortescue has deliberately lowered the average grade of its product by lowering the cut-off grade at its Cloudbreak operation
Iron ore price charts for November 2, 2017: Tianjin benchmark rose 80 cents to $59.30. Paper was flat overnight. Steel flat yesterday. CISA released mid-October output number for major mills down -1% to 1.82mt per day. Nothing out of the ordinary for this time of year. We’re just range trading here. Nothing changed for me.
Via Credit Suisse: Fortescue’s net present value would fall to just $1.40 a share if the current discounts are sustained. The lower-grade iron ore predominantly produced by Fortescue has historically sold at a 10 per cent discount to the spot price of higher grade material, but the gap has blown out to around 30 per
Iron ore price charts for November 1, 2017: Tianjin benchmark rose 10 cents to $58.50. Paper dead cat bounced overnight, especially coking coal. Steel futures firmed. I do yet think we’re at the bottom. Some comments from The Australian: Chinese delegates at the International Mining and Resources Conference in Melbourne reiterated medium-term forecasts of about
Iron ore price charts for October 31, 2017: Tianjin benchmark lifted 40 cents to $58.40. Paper was up a little overnight. Coking coal was hammered. Steel is fading. Last week’s port stocks rose a demoralising 3.6mt to 135.5mt. Yesterday’s steel PMI fell to 52.7 and 55.9 for new orders. Markets took the data as glass
The oil bulls are snorting: The OPEC trade is back, and Saudi Arabia is in the driver’s seat. Just before the de facto OPEC leader doubled down on its plan to drain the oil glut, propelling Brent crude prices beyond $US60 ($78) a barrel for the first time since 2015, hedge funds were almost as bullish
Iron ore price charts for October 27, 2017: Tianjin benchmark got smoked $1.90 to $58.70. Paper recovered a little overnight. Steel fell sharply. Everything is at the bottom of recent ranges and shutdowns have not even started in earnest yet, via Reuters: “More cities, including Tangshan, have been ordered to deepen production cuts during the
Iron ore charts for October 26, 2017: Tianjin benchmark fell 0.8$ to $60.60. Paper fell further overnight. Steel futures are confused. More from Reuters: China has stepped up efforts to cut industrial production to to combat smog, which typically occurs during the winter months as industrial emissions mix with smoke from coal-fired heating units. Steel
From FMG’s September QTR production report: • Steel output in China remained at near record levels during the September 2017 quarter maintaining the strong demand for iron ore. Steel mill profitability has also remained at historically high levels and continues to incentivise blast furnaces to maximise production supporting the premium for higher grade iron ore.
Iron ore price charts for October 25, 2017: Tianjin benchmark fell 60 cents to $61.10. It is trying to hang on to $60. Paper was soft. Steel strong. Reuters has texture: Mills in northern Chinese cities are reducing production in line with the government’s orders to limit pollution over winter, helping steel prices climb 6
Via Caterpillar: Caterpillar continues to see strength in a number of industries and regions, including construction in China, on-shore oil and gas in North America, and increased capital investments by mining customers. We are working with our supply chain to increase production levels to satisfy customer demand for those markets that have improved. In July 2017, Caterpillar
Iron ore price charts for October 23, 2017: Tianjin benchmark fell 50 cents to $60.30. Paper stable overnight. Steel the same yesterday. Port stocks rose 800kt to 132.15mt last week. First, a confession. I’ve made a mistake. In the recent China September data dump I accidentally dropped the wrong data point into my China construction
Tianjin benchmark up $1.2 or 2% to $60.80. Paper lost most of Friday gains overnight. Steel futures were strong. In news, China’s NDRC hosed off growth expectations Friday: China has forced 28 cities in smog-prone northern regions to reduce emissions of airborne particles known as PM2.5 by at least 15 percent from October to March