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 (cars and ports to the moon)

Iron ore price charts for January 22, 2018: Tianjin benchmark fell 95 cents to $75.90. Paper is soft. Steel firm. Port stock hilarious, up another 1.57mt to 154.4mt. Reuters sums it up: Record stockpiles of iron ore at China’s ports could produce steel for 107 million cars — more than three times the country’s annual


When will iron ore crash next?

When will iron ore crash next? Via Deutsche: Try April-June! There are good reasons for it. March marks the peak of the post Winter restocking and running into June we see steel mills selling inventory to raise year-end cash for taxes just as miners glut the market to reach year-end volume targets.


Daily iron ore price update (China data)

Iron ore charts for January 18, 2017: Tianjin benchmark rose 50 cents to $74.85. Paper was stable. Steel firmed. Chinese data last night showed the impact of Winter shutdowns: The precipitous nature of these output pullbacks suggests firmly that we’ll see some pent-up demand when the restrictions are lifted in late March. That suggests that


CBA: Iron ore gunna crash

Via Vivek Dhar, Mining and Energy Commodities Analyst at CBA: “We still anticipate iron ore prices to fall later this year on surplus concerns,” he said in a note released today. “Chinese iron ore supply, which is the most expensive in the world due to its low grade, will be key to this outcome.” Dhar


RIO hits iron ore production target

Via RIO today: Pilbara operations produced 329.8 million tonnes (Rio Tinto share 271.3 million tonnes) in 2017. Fourth quarter production of 87.9 million tonnes (Rio Tinto share 72.9 million tonnes) was three per cent higher than the fourth quarter of 2016, reflecting the implementation of productivity projects across most sites. This strong performance was achieved


Daily iron ore price update (ports OMG)

Iron ore charts for January 15, 2017: Tianjin benchmark fell $1.80 to $76.50. Paper firmed overnight on the plunging USD. Steel eased. No need to adjust your TV, ports stocks did rise another 4.83mt last week to an astonishing 152.83mt. I’ll simply render this nice chart which shows the correlation between the Chinese housing and


Daily iron ore price update (Port Hedland surge)

Here’s the latest price update with futures at their highest levels n four months as speculators continue to react to moves by Beijing to tighten up on implementing steel production capacity cutbacks: Meanwhile iron ore exports from the Port Hedland terminal are at 46.2Mt, up 5% year-on-year. More from the Mining Journal: Total iron ore exports from Port


The commodity fantasy plateau rolls on

The Department of Industry, Innovation and Science have released their latest report and forecasts into commodities, doubling down on the “small correction, then steady plateau” meme. From the ABC: In 2018-19 earnings are forecast to fall to $200 billion, driven by declining iron ore and metallurgical coal prices. The expected 7 per cent fall in export earnings


Daily iron ore update (Futures bounce)

Iron ore price charts for December 20, 2017: Spot flat. All futures up as steel prices bounced back from two-week lows. Here’s some commentary from Hellenic Shipping News: “Some mills are buying depending on their weekly demand, there’s no rush,” said a trader in China’s southeastern Shandong province, on the current appetite for iron ore


Daily iron ore price update (Rises all round)

Iron ore price charts for December 18, 2017: Everything up. The AFR provides some context: Chinese steel mill profit margins are driving the market. Chinese steelmakers have cut production after the government ordered industrial plants in 28 cities to slash output between mid-November and mid-March to reduce air pollution… However, there’s still the problem of climbing port


UBS upgrades iron ore for 2018

UBS giving the miners a lift today: UBS VIEW China’s property & infrastructure construction boom will slow in 2018e & 2019e, but we don’t expect a collapse, because i) slowing is by policy (tightening) design, ii) property inventory drawdown means developers will be building a higher share of (flat to lower) sales than last year,