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 (orgy)

Iron ore prices for August 13, 2018: The stimulus party rolls on, largely confined to futures markets. This is still not inconsistent with seasonal patterns, especially so since the Winter shutdowns bring forward demand. Rebar inventories are still falling at a decent clip even if well above last year. My outlook remains unchanged. Overnight Chinese

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China is fantastically reliant upon Australia

We all know how it ends. Eventually China is overwhelmed by its own bad debt. The dreams of empire crumble to empty vestiges, wealth greys with demographics, dynamism sinks into the rentier bog and endless growth into secular stagnation. This is China’s destiny and Australia will suffer for it. But in the meantime we are

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Daily iron ore price update

by Chris Becker Here’s the latest price update from the iron ore complex: Spot prices pulled back but rebar remains elevated after reaching a six year high before closing higher, but there’s growing concern the breakout in prices is not sustainable against actual demand. More from Reuters:   Rebar hit a high on Tuesday of

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Daily iron ore price update (rebar rally continues)

by Chris Becker Here’s the latest price update from the iron ore complex as of 7th August: Rebar hit a six year high on Tuesday as electricity rationing in China and continued plans to curb industrial production during winter raised concerns about tighter supply. On the Dalian Commodity Exchange the January 2019 contract took over from

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Trade war slashes mining profits

Via UBS today: UBS View: Prices lowered modestly as trade wars escalate Trade tensions have escalated. Following the first round of new tariffs on two-way trade, the US has identified another US$200bn for a 10% tariff, potentially from September. Our China, US & ASEAN economists’ downgraded growth. Higher trade barriers equal lower trade volumes &

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Fortescue the “next Atlas”

Never a dull moment with Cliffs managing director Lourenco Goncalves: “The shift toward higher grade is there to stay, the shift toward pellets is there to stay, and BHP and Rio Tinto are on the path to become the next Fortescue, and Fortescue is already on the path to become the next Atlas,” said Mr Goncalves

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Daily iron ore price update (history repeats)

Iron ore prices for July 19, 2018: Spot up. Paper down. Steel firm. We’re still in the equilibrium. History is repeating for miners. We already have BHP, RIO, FMG and Vale all investing heavily in high grade output. Now India joins them, from Creamer’s: Information and data sourced from industry indicate that overseas shipment and

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Daily iron ore price update (imports)

Iron ore prices for July 13, 2018: Spot flat. Steel firm. Paper flat. Rebar inventories fell 2.1% to 4.57mt, still well above last year and quite adequate. Steel exports held their rebound in June, I’m guessing on OBOR-related flows: Iron ore imports definitely appear to have topped: I reckon there’s a more than even chance