From RIO’s third QTR production report: Pilbara operations Pilbara operations produced 241.9 million tonnes (Rio Tinto share 198.4 million tonnes) in the first nine months of 2017, one per cent lower than the same period of 2016, mainly due to weather disruptions in the first half of the year. Third quarter production of 85.0 million
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.
Also Check – Australian Dollar
Find below our daily feed of market analysis
Iron ore price charts for October 16, 2017: Tianjin benchmark lifted 4.5% to $62.4o. Paper gave it all back overnight. Steel futures rose a bit yesterday. Port stocks fell 2.5mt last week to 130.35mt. Nothing changed for me. The path of least resistance still seems lower on the basic guess that winter shutdowns will balance
Iron ore price charts for October 9, 2017: Tianjin prices jumped 4.5% back to $60. Paper went higher still overnight. Coking coal is slowing. Steel futures went nutso! The cause of the excitement was Chinese trade data which really did impress with iron ore imports soaring to 102.8mt, highest ever by some margin: However, at
Iron ore price charts for October 12, 2017: Tianjin benchmark fell 40 cents to $57.40. Steel futures caught up to some Golden Week losses. Coking coal is saving the complex. Reuters explains: Northern China’s Shanxi province, the country’s top coal producing region, will aim to cut concentrations of hazardous airborne particles known as PM2.5 by
Dalian iron ore is falling again today: The Aussie dollar is trying to climb back above 78 cents, former support now resistance: Big Iron charts are starting to break. BHP is still in a bullish ascending triangle but is also threatening to double top: RIO is more bullish but has been turned away at resistance.
Iron ore price charts for October 11, 2017: Tianjin benchmark was hit $1.30 to $57.80. Dalian held on overnight. Coking coal did better as plant shutdowns help it. Steel futures are breaking down. Reuters has texture: Inventory of rebar, a construction steel product, among Chinese traders rose by more than 250,000 tonnes from Sept. 29
Some numbers today on bulk commodity third quarter shipments. Via UBS, first BHP: Iron ore shipments for the quarter from WAIO are forecast to be down ~11% sequentially at 63.6Mt (100% basis) based on vessel movements. This reflects scheduled port maintenance on BHP’s berths during the quarter at Port Hedland. Global iron ore production (equity)
Iron ore price charts for October 10, 2017: Tianjin benchmark cratered 4.1% to $59.10. Paper firmed. Steel futures fell but remain elevated. The FT has texture: The price of steelmaking ingredient iron ore, a major source of profit for some of the world’s biggest mining companies, has fallen below $60 a tonne on concern demand
Iron ore price charts for October 9, 2017: Tianjin benchmark fell 10 cents to $61.60, outdoing paper which firmed slightly overnight. Coking coal is falling fast. CISA mid-September output was easing as normal. The winter shutdowns are all the rage now, via Reuters: Chinese authorities have ordered heavily air-polluting industries including steel to curb output
Son of BREE is out with its commodity wish-list for September. It’s projecting declines for next year but not deep enough: Iron ore is too bullish: Australia’s iron ore export earnings increased by 32 per cent to $63 billion in 2016–17, driven in large part by higher prices. The value of Australia’s iron ore
Physical iron ore trade resumed yesterday with a whimper as Qingdao fell to $61.34 and Tianjin benchmark shed 30 cents to $61.20: Paper markets are still closed but CISA released mid-September major steel output data which fell 1% to 1.85mt per day: Pretty normal so no insight into shutdowns there yet. We also saw Port
From Mornginstar: Much has been written about China’s Belt and Road Initiative but Morningstar equity analysts think much of the overwhelmingly positive commentary lacks context and is wide of the mark. Major iron ore miners such as BHP Billiton (BLT), Rio Tinto (RIO), and Fortescue (FMG) all expect BRI to drive further growth in steel
A couple of stories today are important as China remains closed for Golden Week. Iron ore paper and physical are not trading and SGX has been running around on the spot: Last week’s iron ore port stocks jumped 2.75mt to 133.6mt: That is obviously a bearish signal coming into the break vis shutdowns dampening iron
Iron ore price charts for September 29, 2017: Tianjin benchmark fell 1.9% to trade at $61.50. Paper was flat. Steel futures eased. China is on holiday until Thursday so this week’s trade will focus on SGX. More bearishness from Bloomberg: “We anticipate the price of iron ore to remain under pressure in the coming quarter,” Geordie
Tianjin benchmark fell 10 cents to $62.60. Paper eased lower. Steel too. Coking coal futures fell. Coke was hardest hit. Texture from Reuters: “Iron ore fundamentals are not good,” said Zhao Xiaobo of Sinosteel Futures in Beijing. “Imports will rise in the fourth quarter and the environmental restrictions on steel mills are reducing iron ore
Iron ore price charts for September 28,2017: Tianjin benchmark fell sharply to a new correction low of $62.80. Paper was firm yesterday but was hit overnight. Coking coal futures hit new lows and iron ore is at the brink of same. SGX has taken a breather. CISA steel output data for early September was unsurprisingly
Iron ore prices today only (in Canberra for the Thunder Tour), Tianjin benchmark ore lifted 60 dent to $64. Qingdao was up $1.89 to $64.95. Dalian was up a little overnight to 470. Coking coal futures were down a touch to $180.23. Rebar futures were flat 3909. In news, Barclays has beared-up: In a note
It’s so 2015 for big miners and their fan boys, via the AFR: Iron ore is officially in a bear market but that’s no reason to give up on the mining sector, according to Morgan Stanley’s mining sector analysts. Still, the latest downward move for the iron ore price tallies with Morgan Stanley’s price expectations
Yesterday China tightened again on property: Chinese property stocks plunged in Hong Kong after a raft of mainland cities added housing curbs, wrongfooting investors betting that the government’s next step would be to ease restrictions. Eight cities including Chongqing and Nanning rolled out curbs over the weekend, with most banning home resales within two to three
Iron ore price charts for September 25, 2017: Tianjin benchmark rose 50 cents to $63.40. Paper lifted a little overnight. Coking coal futures too. I’ve swapped from rebar average to futures which report more reliably. They are off a little. Reuters has texture: China’s steel raw materials extended recent losses on Monday, with coking coal down
The RBA famously described the China mining boom as a three phase event: The mining boom can be viewed as a confluence of events that have boosted mineral commodity prices, mining investment and resources production. This combination of shocks has boosted the purchasing power and volume of Australian output. It has also led to large
Iron ore price charts for September 22, 2017: Tianjin benchmark fell 10 cents to $62.90. Paper is still burning. Steel yet to update. Coking coal was cooked. Texture from the AFR: China’s iron ore demand is expected to drop 7 per cent, as steel-making cities across northern China begin rolling out anti-pollution measures from next
No, says ANZ boldly, via BS: ANZ analysts Daniel Been and Giulia Lavinia Specchia said that the falls only present limited downside risk for the Aussie. For starters, they noted that the recent correlation between iron ore prices and the AUD/USD exchange rate is below it’s long-term average. In addition, “the low correlation between the
Forgive the lack of charts today. I’m on the road. Tianjin benchmark was flushed 7.4% or $5 to $63. Qingdao spot got hammered 6% or $3.56 to $66.09. Dalian futures fell another 2.9% overnight to 472 yuan. Coking coal futures were monstered 4.1% to $186.60. SGX twelve month futures were pounded $2.94 to $55.31. Rebar