Iron ore prices for January 15, 2021: Everything firm. Port stocks fell last week to around 125mt. China imported 96.75mt in December and 1.17bn in 2020, up 9.5%: As for the year ahead, my thoughts are these: Chinese iron ore restocking is ongoing (bullish); Chinese mills have run down COVID steel stocks (bullish); global recovery
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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The iron ore complex settled a little on Thursday, although shorter-term futures pushed higher as restocking demand increased at mills across China. Texture from Reuters on the record levels of imports of iron ore: “(Mills) are currently at pre-holidays restocking period, adding that steel profits are good, there’s a possibility that they will increase purchase
The iron ore complex was still elevated in trading yesterday, but coking coal futures took a dump as spot iron ore remained bid above the $171USD per tonne level: Having run at huge levels through much of last year, Chinese steel inventories have corrected to normal levels: This leaves mills with less scope to manage
Via SCMP: Brazilian port operator Grao Para Multimodal’s executive director, Paulo Salvador, knows there is plenty of untapped high-grade iron ore in northern Brazil, but a mix of bureaucracy and limited capital have stymied efforts to begin production for years. Across the states of Para, Piaui and Tocantins, there are at least three mines amounting
Winter restocking in China has disrupted steel prices across the iron ore complex with rebar futures down more than 3% during Tuesday’s session before slightly recovering, as coking coal also dropped. This hasn’t effected the spot iron ore price, or indeed Dalian futures which are treading water: The fallout from the WA government’s cash grab
The iron ore complex had a wobbly start to the trading week as futures dropped alongside spot prices on Monday, as stockpiles increased for a second consecutive week on easing seasonal demand. Rebar futures dropped the most, down nearly 4% while spot iron ore still remains above $170USD per ton: Meanwhile the Samarco mine will
Via Goldman: 1) OPEC and Georgia help neutralize near-term risks. The events of last week substantially reduced the downside risks to our bullish commodity narrative — a fact reflected in the rise in oil and copper alongside the sharp decline in gold. First, Saudi Arabia agreed to a unilateral production cut that neutralized current lockdown
The iron ore complex rose once again Friday, sending spot prices slightly higher while Dalian futures rose over 3%, dragging rebar and coking coal higher as stainless steel futures also lifted: The WA Government has slogged iron ore ship operators in the Pilbara region, trying to extract yet more funds this time in the form
The iron ore complex surged on Thursday, bringing prices to new highs as demand for iron ore remains high in the Middle Kingdom: Spot prices exceeding $170USD per ton while coking coal and rebar advanced nearly 2%. The lifting of a two year ban on imported scrap steel into China last week are considered “symbolic
Iron ore prices continued to surge yesterday, despite some hesitation on futures markets as concerns over current iron ore supply weighed on the complex. Here are the latest prices, with rebar and coking coal dropping slightly: Seaborne volumes are in a slight decline: After a two-week rise, iron ore volumes dispatched from 19 ports and
The iron ore complex continued to rise on speculation yesterday, with spot prices lifting well above $160USD per ton, while Dalian futures continued to put on gains, despite the latest five year plan from Beijing supposedly putting a dampener on steel demand. Here’s the latest prices and charts: Trading Economics reckon there will finally be
The iron ore complex is taking it a little more easy into the new calendar year with seaborne prices and Dalian futures lifting on Monday, as firm demand in steel and positive sentiment after the New Year holiday continued: The Chinese are starting to get real about diversifying away from near total reliance on Australian
Iron ore prices continued to retract across Chinese exchanges on Wednesday, with Dalian futures hit the hardest – down nearly 10% at one point: The Dalian market regulator is thinkning about cutting position limits by more than half in the wake of the increased speculation, but this may not be enough as demand continues to
The iron ore complex finally took a deep breath yesterday, with prices tumbling across Chinese markets, as the Dalian exchange in particular listening to some steelmaker concerns that speculators are “ruining” (sic) prices. Spot iron ore was off by nearly 6% while futures fell back more than 3%: S&PGlobal were quick to share their view
You can’t stop the iron ore juggernaut with spot Tianjin prices up nearly 8% while Dalian iron ore futures jumped nearly 10% as rebar futures also soared upwards on Monday trade: This is supposedly due to the Friday news of another landslide at a Vale mine in Brazil, which resulted in the death of one
Iron ore prices for December 17, 2020: Spot is going to new highs today after paper blasted off last night. Steel is still rising so some inflation is being passed on. There is no near term end to this: Chinese demand is excellent; Chinese inventories are short; ex-China demand is recovering; DXY is getting hammered;
That’s the question that has plagued me for ten years. Via James White of Lessep Investment Management, at the AFR: If China’s annual residential property sold was built in Eureka Towers (14,000 of them) and one constructed every 65 metres, it would line the Hume Highway from Sydney to Melbourne. In terms of population, 14,000
Via Goldman: Growth to feel the weight of policy normalization in 2021While the near-term growth picture looks encouraging, tightening is clearly the direction of travel when it comes to policy. To be clear, we expect stable policy rates and no hikes in OMO or MLF rates next year. This is because interest rates have mostly
Iron ore prices for December 14, 2020: Spot flamed out. Paper too. Steel has not updated. Yesterday’s outburst in Beijing about unfair trade practices managed a little correction. But, fear not, such tantrums are typical for this time in the cycle. Beijing and CISA have been spitting the dummy during price spikes like this for
Iron ore prices for December 11, 2020: Spot up again. Paper as well. Steel has not updated. Records are tumbling. As iron ore roars higher: It is only $7 below its all-time AUD high: As Dalain futures hit their all-time high: China is not happy, whinging like a stuck pig: China’s steel industry body has
Iron ore prices for 10 December 2020: The news flow is relentlessly bullish. La Nina fears are realised, at Reuters: Pilbara Ports Authority said on Thursday it has started to clear large vessels out of Port Hedland, the world’s biggest iron ore export hub, as it issued a cyclone warning. A tropical low located some
Iron ore prices for December 9, 2020: Spot goes up no matter what. Paper is on fire again. Steel is stuck and margins are collapsing. Never underestimate the iron ore market’s ability to move far and fast. Few markets are so pure in terms of price responsiveness to supply and demand shifts. Right now we
Via Sinocism: As China-Australia Ties Worsen, Iron Ore Remains Bulletproof – Bloomberg China has few alternatives as it seeks to stimulate its economy post Covid-19 through infrastructure investment, with Australia accounting for more than half of iron ore shipments globally. If Beijing were to try to purchase solely from non-Australian producers, at best it could
Iron ore prices for December 8, 2020: Spot at new highs. Paper flamed out. Steel ahs not updated. Some explanation of recent price strength from Robert Rennie: Our bulk shipping activity models point to surprisingly weak November iron ore exports at 70mt, down from 76mt in October. Given the strength of Chinese iron ore imports
Iron ore prices for December 7, 2020: Spot booming. Paper too. Steel stalled with margins for mills getting crushed. Brazilian November exports fell to 31mt: I don’t know what Vale is doing. It’s supposed to be increasing volumes. Chinese imports were down in November too: Still bullish on prices for the next six months.