by Chris Becker Spot prices slipped yesterday with the Tianjin price down over 1% while Dalian futures were also volatile in morning trade before recovering alongside other assets in China in the afternoon: Meanwhile, according to Metalminer China is expected to drive a surge in scrap imports, due to a recent relaxation of scrap import
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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by Chris Becker Iron ore spot and future prices rose yesterday, but Dalian exchanges were volatile, falling more than 3% before recovering with a mild loss. Rebar and coking coal were steady as Bank of America lifted its forecasts for iron ore, adding to the chorus of analysts who see rosy futures for the supply
by Chris Becker Spot iron ore prices leaped over 2% yesterday while 12 month futures were marginally higher as the Singaporean exchanges reopened, the Dalian exchanges and rebar prices slipped as US/China tensions continued to boil over: Meanwhile, the perennial prick, malcontent and literal deadweight Clive Palmer is up to no good again, wielding his
by Chris Becker The iron ore complex is having a mixed start to the week due to the Singaporean holiday, with spot prices and 12 month Singapore futures unchanged, while Dalian futures dropped on increased US tensions: Westpac are still moderately bullish with a $100US per tonne forecast, but see a decline down to $87
Iron ore prices for August 6, 2020: Spot scorcher. Paper too. Steel is muted but OK. OK, so get this: Rising car and excavator sales in China further buoyed sentiment, analysts at Beijing-based Sinosteel Futures Co Ltd said in a note. “Good car sales data shows that domestic demand is improving, and excavator sales also
DXY is struggling to hold support: The Australian dollar scorched everything in sight: Gold mania: Oil flamed out: Metals mania: But a GLEN shocker landed on miners: EM stock breakout: Junk fine: Yields squashed: Stocks mania though not Europe (or Australia): The only chart that matters mattered: Not much happened, via Westpac: Event Wrap US
Not that this matters much for the deficit, which is now irrelevant, but it will matter to the Australian dollar. Via the AFR: Glencore is working on plans to slash output from Australian coal mines in response to weak prices, in a move that will reinforce the Swiss miner’s reputation as the most active manager
Iron ore prices for July 31, 2020: Spot stable. Paper up. Steel plodding along. The Chinese Steel PMI was out and it wasn’t great: That’s some meh levels that do not justify today’s prices. But that only strengthens my notion that this is a policy-driven rally with steel mills pumping the stuff out purely to
With the sheer enormity of the COVID19 pandemic’s economic impact only starting to dawn, David Llewellyn Smith and Leith Van Onselen spoke with Gunnamatta on the major forms the shock has taken through the Australian economy. Over the course of about 75 minutes (3 parts) they cover the ugly numbers and the dynamics across
Iron ore prices for July 31, 2020: Vale released its results and claimed to be on track to meet its volume guidance. Via Bloomie: “Following the reduction of uncertainties related to the pandemic, with risks of a second wave in China mitigated and the stabilization and decline in COVID-19 cases, especially in the northern states
That’s China’s plan. And RIO is integral to it, via Bloomie: Rio Tinto Group is accelerating work toward potential development of the giant Simandou iron ore project in Guinea, as half-year earnings showed the steel-making ingredient dominated the second-biggest miner’s profits. …“Under all scenarios Simandou will be developed, with or without Rio Tinto,” Chief Executive
Iron ore prices for July 29, 2020: Chinese demand still looks good: Brazil still looks bad: RIO loves it: Rio Tinto says China’s heavy industry is working at full speed and the Chinese economy could grow at up to 8 per cent next year, fuelling demand for Australian commodities like iron ore. China has responded
Iron ore prices for July 28, 2020: Chopping around broader risk sentiment. Port inventories hit 115mt last week: How high they go this round will depend upon how long Brazil is out. I’d say at least 140mt. Brazil’s virus count is still very bad: Chinese empty apartment demand is still good: Still no end in
Iron ore prices for July 24, 2020: ‘ Spot down. Paper down more. CISA steel output remains ridiculously amid high and rising inventories. I am not concerned about it because market factors have been suspended. This is policy-driven output. I still see iron ore as strong until Sep/Oct seasonal weakness. Even more so if DXY
Iron ore price for July 22, 2020: Some material from Clyde Russell: China imported 101.68 million tonnes of iron ore in June, a 33-month high, taking imports for the first half of 2020 to 546.91 million tonnes, up 9.6% over the same period in 2019. Japan imported 5.08 million tonnes of iron ore in June,
Iron ore prices for July 21, 2020: Vale released its quarterly update and is surely joking: To meet its guidance Vale will have to do this: Vale said the pandemic had reduced its iron ore output by 3.5 million tonnes over the past three months, and would reduce output by a further 6.3 million tonnes
Iron ore prices for July 17, 2020: Still solid. I still think we go higher. But there are some topping signs emerging. This: Still plenty of room to rebuild inventory but we have turned. And this: Brazil is flattening the virus curve. A drawdown is not imminent but the seasonal weakness in September/October could turn
Iron ore prices for July 16, 2020: Yesterday’s China data was about as bullish as it can get for iron ore. Credit and housing prices are pushing higher. Empty apartments are booming: Steel output is mad: And, the inputs into production have reoriented away from scrap: Basically, blast furnace production is dominating EAF in way
Via The Australian: China has warned Australia that excessive anti-dumping complaints by BlueScope Steel threaten our industry and crucial iron ore exports. …In its submission, the Chinese government said: “China would also like to remind Australia that taking trade remedy measures for similar products intensively may raise the price of relevant products, which will cause
Iron ore prices for July 15, 2020: Westpac has a nice wrap on things: The recovery in the Chinese steel industry … From the demand side, the outlook for iron ore and met coal remained quite robust through June. Pig iron production has seen a very strong recovery since March, lifting a further 7.4% in
Iron ore prices for July 14, 2020: Spot powered on. Paper flamed out. Trade data is bullish with China nearly breaking the imports record in June and growth now surging: Conversely steel exports are destroyed, not that it matters: Data remains crap outside of empty apartments and bridges to nowhere: Brazil is still buggered: Onwards
Iron ore prices for July 10, 2020 (growth rates are weekly): Aaaand we’re off. In a classic seasonal pattern, steel mills have returned from Dragon Boat and gone long iron ore restocking. I still see us popping straight to $130. Higher is very possible if Brazil hiccups. There is plenty of room to restock: Steel
by Chris Becker Iron ore continued its surge yesterday with spot Tianjin prices up above the $107 barrier, while 12month futures gained, but shorter term prices slipped alongside rebar and coking coal. Here’s the table and latest charts: Iron ore imports to China have fallen to their lowest level since October 2016, according to Steelhome,