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 (contagion)

Tianjin benchmark fell 40 cents to $63.85. Coking coal is getting the treatment. Steel is fading. Hard to know where we go from here. We’re entering a seasonally strong period for prices but the combined Fed tightening/emerging market crisis and Trump trade war is developing into a very serious headwind. China knows it, via Reuters:

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Daily iron ore price update (lifting price outlook)

Iron ore prices for June 12, 2018: Tianjin benchmark lifted 25 cents to $65.95. Paper was flat overnight. Steel is stalled. The Chinese stock draw down is slowing as noted yesterday: “As the low season for steel demand is approaching, price hikes at mainstream steel firms helped to stabilise market sentiment,” said analysts at Orient

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What do new US steel tariffs mean?

Via the ABC: The Trump administration’s announcement it will impose tariffs on steel and aluminium imports from Europe, Mexico and Canada has drawn swift vows of retaliation from key allies, inflaming trade tensions and sending stock markets sinking. The administration’s move threatens to inflate prices for US consumers and companies and heighten uncertainty for businesses

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Daily iron ore price update (astonishing steel boom)

Iron ore prices for May 31, 2018: Tianjin benchmark lifted 30 cents to $64.30. Paper lifted overnight. Coking coal is off to the races again. Steel prices are firm. CISA output for major mills reached an astonishing 2mt per day in mid-May. Literally off my chart. That this extraordinary output is transpiring in conjunction with

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The iron ore “scraptastrophe” is here

Terrific new report from Platts on the iron ore “scraptastrophe”. Beijing’s visible hand: China’s demand for iron ore and scrap through 2020 The Chinese central government’s introduction of tougher environmental policies – including lower utilization rates over the 2017-2018 winter heating season – has brought new challenges of supply disruption and higher production costs. Ongoing

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Daily iron ore price update (it begins)

Iron price charts for May 18, 2018: Spot fell. Paper burned overnight. Steel broke Friday. The mid-year draw down has begun. Don’t tell anyone but it happens pretty much every year as summer rains disrupt Chinese construction and steel mills rebalance inventories going into EOFY. This year there is the added complication of the developing