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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Iron ore is going to tumble too

Iron ore prices for March 18, 2020: Dalian was boosted yesterday by this: Brazilian iron ore producer Vale has shut its Teluk Rubiah iron ore blending terminal in Malaysia until 31 March to comply with a lockdown aimed at slowing the coronavirus outbreak. The Malaysian government has asked Vale to halt operations at the terminal

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Daily iron ore price update (yawn)

Iron ore prices for March 9, 2020: Spot down. Paper too. But it’s the calm that impresses. Port stocks eased agin last week to 126.25mt. China is relatively short of iron inventory after last year’s Vale-inspired draw down. That said, I still don’t get why steel prices aren’t crashing amid the glut. Still lot’s of

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Daily iron ore price update (running on empty)

Iron ore prices for Febraury 29, 2020: The miracle price boomlet goes on. Mills are restocking like zombies, via Bloomie: The collapse in economic activity amid China’s unprecedented measures to contain the coronavirus outbreak means there are few buyers of steel, which has sent prices tumbling and put margins under intense pressure. However it’s difficult

3

UBS raises iron ore price outlook

Coronavirus leads to GDP downgrades The outbreak of the coronavirus has forced downward revisions to our GDP forecasts from our (US, China, & Global) economists (2020e GDP growth -20bp to 2.9%). The downgrades have been most severe in 1) China & 2) Q1 2020. While uncertainty over the severity and duration of the outbreak remains,

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Fortescue mines money

Here it is. El Dorado: The key, of course, is the realised price. Thanks Vale! At these kinds of prices, FMG is literally printing money. Roughly $7bn of it over the full year delivering a trailing P/E of just 5x. But is it sustainable? At 2019 prices, the profit is slashed in half and the

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UBS: Will demand or supply hit shape iron ore in 2020?

Via UBS: Checking in with Platts Steel Raw Material Analysts We hosted Paul Bartholomew (Senior Managing Editor, Steel Markets) and Jeffery Lu (Managing Editor, Met Coal) to discuss their respective markets and COVID-19. While the LT implications of the outbreak remain uncertain, the immediate impact on productivity is becoming apparent. Platts is concerned that the