Iron ore prices for April 19, 2018: Tianjin benchmark lifted $1.85 to $68.30. Paper was limit up at the close yesterday but came off overnight. Steel rose. Citi captures the best way to think about the Chinese easing: Back in November the PBoC introduced what some have termed ‘Yield Curve Control With Chinese Characteristics’ when
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 prices for April 18, 2018: Tianjin benchmark added $2 to $66.45. Paper jumped overnight. Steel yesterday. Here’s the driver of the pop: China slashed the RRR for banks. This will free up a bit of lending. However, the PBOC has also been tightening money market rates. That said, bond yields have broken down
Tianjin benchmark fell $1.20 to $64.05. Steel is range trading. Coking coal is weak. Iron ore port stocks eased last week ad did rebar inventories. No change. We’re going lower. One reason why is that Vale has some serious catching up to do on volumes: The world’s top iron ore producer said that heavy rains
A nice primer here from BofAML: Met coal prices more than doubled from ~$90/t to ~$200/t in six weeks in AugustSeptember 2016 due to China’s production curb on local met coal, where government restricted the number of working days from 330 days/year to 276 days/year. This turned out to be a game changer for the
Via Xinua: China will introduce foreign investors to trade in domestic iron ore futures from May 4, according to the country’s securities regulator. The iron ore futures are traded on the Dalian Commodity Exchange, which rolled out rules in late March to guide foreign investors to participate in the market and took a market test
Iron ore prices for April 13, 2018: Tianjin benchmark rose 50 cents to $65.25. Paper fell back overnight. Coking coal continues to fall. Friday’s China trade numbers had a little rebound in steel exports to 5.65mt: We can expect that to continue as the Chinese steel price falls, though yesteryear’s boom will not return. We
Via The West: Mt Gibson Iron boss Jim Beyer says the wide price spread across ore with varying iron ore grades is here to stay. Speaking after the miner released its March quarter report, Mr Beyer said while there would be “pinching and swelling” based on seasonal demand and short-term, city-specific policy changes in China,
Iron ore prices for April 12, 2018: Tianjin benchmark rose 0.55 to $64.75. Steel is marking time. My view remains the next big move is down. Coking coal is breaking. Reuters has texture: Coking coal futures in China fell almost 4 percent on Thursday and iron ore also slipped, pressured by worries that demand for
Via The West: MinRes announced a $280 million, all-scrip bid for Atlas on Monday, which would give its shareholders one new MinRes share for every 571 Atlas shares they hold. The offer values Atlas about 3¢-a-share, representing a 59 per cent premium to its last traded price of 1.9¢ before the offer was announced. Atlas’
Iron ore prices for April 11, 2018: Tianjin benchmark was down $1.65 to $64.20. Paper held on overnight. Coking coal futures are breaking. Steel is soft. China is slowing. It always begins in the PPI. Some more on that from Vertical Group: FIRST… THE “HARD DATA”. Last night, China released factory inflation numbers (i.e., PPI), which slowed for
Iron ore prices for April 10, 2017: Tianjin benchmark up $1.80 to $65.85. Paper up more overnight. Steel too yesterday. Rebar inventories are running down now which is perfectly normal. CISA steel mill output rose 3% mid-March to 1.78mt per day. It should converge with last year’s output numbers over the next few months
Iron ore prices for April 9, 2017: Tianjin benchmark rose $1.05 to $64.05. Paper jumped overnight though that was before markets calmed down. Steel is still soft. Chinese iron ore port stocks fell a bit to 161.o3 last week. The news is more low grade rationalisation, via AFR: The yawning gap between the prices that
Iron ore prices for April 4, 2018: Tianjin spot fell 80 cents to $63. Paper crashed late yesterday. Coking coal is still holding up. Chinese markets are now closed for two days. More from Platts on coking coal: Met coal premium low-vol Platts spot prices averaged $228.47/mt FOB Australia in Q1, up from $204.67/mt FOB
Via UBS: Is demand OK given some weaker signals in 1Q18? A key question was the strength of demand given weak PMIs in Feb-18 and large inventory builds through Feb+Mar-18. We learned that demand had been held back through these months, reflecting: A later spring festival than usual, where many firms and
Iron ore prices for April 3, 2018: Tianjin benchmark fell $1.60 to $63.80. Paper fell further overnight. Coking coal is falling less (so far). Chinese rebar inventories have begun to fall as per normal after the early year restock. It’s too early to gauge the pace of the draw down as a measure of underlying
Iron ore prices for April 2, 2018: Tianjin benchmark lifted $2.30 to $65.40 over Easter. Paper was strong overnight. Steel isn’t. Chinese iron ore port stocks climbed again to 161.68mt. That we’ve shed 20% in price while these stocks have risen to new highs tells you that speculators are yet to even begin selling and
Here’s the chart: I don’t think I have ever seen a more perfect bearish descending triangle pattern. It’ll need to close here or lower to confirm the break. The target price is anybody’s guess but new lows are quite possible. Weighing today is the 58% iron ore is at $37.44. I reckon it’s headed deep
Iron ore prices for March 27, 2018: Tianjin benchmark rose 40 cents to $63.45. Paper tumbled overnight. Steel rebounded yesterday. Not much of a rebound. All charts have glaringly bearish descending triangle patterns. The key chart is Dalian six month futures which is approaching major support in the 400yn range. Any break of that will
Via FMG just now: The chart is now right at the cliff’s edge of the monster descending triangle pattern: It’s a long way down from here. There are broader implications. Where FMG goes, Australia follows. The big iron ore discounts are also raising the net iron ore price for the Budget. By my calculations, it
Iron ore prices for March 26, 2018: Tianjin benchmark fell $1 to $63.05. Paper was stable overnight. Steel is tumbling still. Rebar inventories have begun to fall, down 3% to 9.49mt which is normal. No change to outlook. As steel margins falls so will the ferrous inputs. We’re going much lower yet. World Steel released
Iron ore prices for March 23, 2018: Tianjin benchmark was thrashed -5.4% to $64.05. Paper stabilised overnight but that was before broader markets fell away. Steel is getting hammered. We’ve much lower to go yet. My targets remain 300o yuan for rebar, $50 for iron ore and 1000 yuan for coking coal in the next three
Via the SMH: Andrew “Twiggy” Forrest has pledged to reinvest every dollar saved from the Turnbull government’s full company tax cuts back into job creation and expanding his operations, in a last-ditch effort to convince the Senate crossbench to pass the $65 billion measure. His company, Fortescue, paid $2 billion in tax last year and
Iron ore price for March 22, 2018: Tianjin benchmark fell 20 cents to $67.70. Steel is breaking down. Coking coal too. CISA early March steel output collapsed 7.2% in an unusually steep post-restock fall. Reuters sums it up nicely: Steel demand typically improves from mid-March in China after a slowdown for the week-long Lunar New
Iron ore prices for March 21, 2018: Tianjin benchmark rose 55 cents to $67.90. Paper firmed a little overnight. Steel as well yesterday despite the early year rebar restock hitting new highs at 9.79mt. Inventories of everything are now brimming. Just as demand is going to come off. That rebar mountain will begin to draw
So says Liberum: The proposition that there’s a structural shift underway in the iron ore tastes of Chinese steel mills toward the less-polluting varieties is just a myth, according to Liberum Capital Ltd. “As margins fall, lower-grade material becomes more economic and the discount shrinks,” analysts Richard Knights and Ben Davis said in a note. “We
Iron ore price for March 20, 2018: Tianjin benchmark fell 55 cents to $66.80. Paper rebounded overnight. Steel bottomed. Coking coal is doing better. There really is no way to go but down for steel and iron ore given inventories and weakening demand growth. Coking coal is the one last hope for the ferrous complex.
Had to come: Cleveland-Cliffs will make the last shipment of iron ore from its Koolyanobbing operations near Southern Cross by the end of June with the potential loss of hundreds of jobs. Cliffs formally notified contractors yesterday that it would wind down the 11 million tonne-a-year iron ore business by June 30, which provides work