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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Vale iron ore rips higher

Via Vale today: Vale´s Production Report for the third quarter of 2020 (3Q20) was announced on Monday, October 19th. The company is evolving with its stabilization plan and delivered a strong iron ore production in 3Q20. Nickel and Copper businesses managed to recover productivity for a solid start in 4Q20, after normalizing routine maintenance in

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Daily iron ore price update (is that a shock I see before me?)

Iron ore prices for October 14, 2020: Spot down. Paper down more overnight. We’re going lower here. Indeed, I’m starting to wonder if there isn’t a little shock unfolding. Brazil is recovering steadily: More importantly, property sales in China have tanked: A few cities have tightened property curbs for investors in recent months but that

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Daily iron ore price update (bearish)

Iron ore prices for September 30, 2020: The whole complex launched on the Port Hedland virus scare. A big overreaction unless I’m missing something and the virus has already skipped the boat. Underneath that, the broader signals are still weakening. The Chinese steel PMI was downright poor with new orders a particular concern: With mill

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China will never cut off Aussie iron ore. But the US will

Let’s get a few things straight. In recent times we’ve seen a swag of analysts and apologists grabbing at the pearls as they worry that “China will cut off Australian iron ore”. Some are even contending that the recent slow disembarkation at Chinese ports is evidence of such, even though delays have hit ships from

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Gubmint: Commodity revenues to plunge on coal

Via the Office of the Chief Economist:   In the June 2020 Resources and Energy Quarterly (REQ) we pointed out that “unlike downturns in previous decades, this downturn was not due to the bursting of excesses built up in the financial system…or in equity markets…. It also differs from the 1970s recessions…which helped contribute to stagflation and

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Daily iron ore price update (All China all the time)

Iron ore prices for September 24, 2020: Spot up. Paper down. Empty apartment sales are still fine: World Steel released its latest: World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 156.2 million tonnes (Mt) in August 2020, a 0.6% increase compared to August 2019. Due to the ongoing difficulties presented by

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UNHCR slams Brazil’s iron ore dam fixes

Via UNHCR today: Extractive industries 15. In January 2019, 270 people died when Vale’s Córrego do Feijão tailing dam in Brumadinho collapsed.13 Most of those killed were Vale workers having lunch in the cafeteria located directly below the tailings dam. The force of the toxic mud dismembered bodies, and shattered what was a bucolic community.

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Gottiboff: Bow to China or it will crash your house price

Gottiboff has joined some dribble stains on his bib today: Australia must brace itself for the next round of the war of words and actions with China – an attack on the price of iron ore and the nation’s key revenue base. My China contacts tell me that the anger China is currently displaying over