Spot down. Paper down. Steel up. The last time steel was at these prices iron ore was trading at $180. Output is astonishing: Texture from Reuters: Mills in the world’s top steel producer churned out 81.24 million tonnes of crude steel last month, up 1.3 percent from June and 7.2 percent from the same month
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 August 13, 2018: The stimulus party rolls on, largely confined to futures markets. This is still not inconsistent with seasonal patterns, especially so since the Winter shutdowns bring forward demand. Rebar inventories are still falling at a decent clip even if well above last year. My outlook remains unchanged. Overnight Chinese
We all know how it ends. Eventually China is overwhelmed by its own bad debt. The dreams of empire crumble to empty vestiges, wealth greys with demographics, dynamism sinks into the rentier bog and endless growth into secular stagnation. This is China’s destiny and Australia will suffer for it. But in the meantime we are
Tianjin benchmark lifted 65 cents to $68.75. Paper fell overnight. Rebar inventories fell again last week but remains well above the lows of last year. CISA daily steel output is trending down solidly. Steel prices have clearly responded to easing Chinese monetary policy. But there is nothing here out of the ordinary yet in terms
by Chris Becker Here’s the latest prices from the iron ore complex: Spot prices keep climbing alongside futures while rebar finally had a pause from its epic recent rise. Production cuts are still planned in the Middle Kingdom while the ongoing trade war seems to have no effect so far From Reuters: Shanghai rebar futures
by Chris Becker Here’s the latest price update from the iron ore complex: Spot prices pulled back but rebar remains elevated after reaching a six year high before closing higher, but there’s growing concern the breakout in prices is not sustainable against actual demand. More from Reuters: Rebar hit a high on Tuesday of
by Chris Becker Here’s the latest price update from the iron ore complex as of 7th August: Rebar hit a six year high on Tuesday as electricity rationing in China and continued plans to curb industrial production during winter raised concerns about tighter supply. On the Dalian Commodity Exchange the January 2019 contract took over from
by Chris Becker Here’s the latest price update on the iron ore complex: That’s a big spike in iron ore futures, lifting back to March levels as the anti-pollution controls and the new retaliation in the trade war start to weigh on medium term sentiment. Texture from Reuters: China’s eastern Shandong province is the latest
by Chris Becker Here’s Friday’s price data from the iron ore complex: Friday saw a big surge in rebar steel futures, lifting almost 2% to a five year plus high, with coking coal prices also higher. This is all on the back on capacity restrictions by steel mills, which is overshadowing any commodity fallout from
by Chris Becker Here are the latest prices from the iron ore complex as of August 2, 2018: Spot prices were steady at Tianjin but Qingdao prices fell 2.4% to $66.55 a tonne. Other future prices fell on the US tariff plans, now going up to 25% on Chinese imports. Texture from Reuters: U.S. Trade Representative
by Chris Becker August 1st iron ore prices: Spot iron ore prices at Qingdao port rose 0.8% to $68.19 a tonne, but the Tiangin price was off 2% in line with other commodities as markets weight up the fallout in the increased US tariffs. . Rebar prices were raised again locally with steel mills lifting prices
by Chris Becker Here are July 31 iron ore prices: It’s all about rebar at the moment, with futures moving to a five year high on the back of production curbs as the pollution controls severely restrict output. More from Reuters, as another major city issues an edict: The city of Changzhou in Jiangsu, China’s
Iron ore prices for July 30, 2018: Spot Qingdao prices were up slightly – $0.16 per tonne to $67.65 while rebar steel futures went to a five year plus high, as concerns mounted on production curbs viz. pollution controls. More from Reuters: All sintering machines and shaft furnaces at steel mills in Tangshan, the country’s top
Iron ore prices for July 28, 2018: Spot was up though paper fell overnight. Steel futures are in Nirvana. Rebar market tightened last week falling 1.8% to 4.88mt. Still solidly up on last year but tightening a little. We’re off to the races with Chinese stimulus and solid steel markets. I have no idea how
Via RBC: The Chinese economy has stayed resilient through the first months of 2018, but the combination of an expected cyclical slowdown, increasingly challenging monetary conditions and increasing risks of tariffs to the wider economy points to a slowdown in Chinese steel demand in the second half of the year. We see a near-term destocking
Via UBS today: UBS View: Prices lowered modestly as trade wars escalate Trade tensions have escalated. Following the first round of new tariffs on two-way trade, the US has identified another US$200bn for a 10% tariff, potentially from September. Our China, US & ASEAN economists’ downgraded growth. Higher trade barriers equal lower trade volumes &
Spot fell. Futures were raided overnight. Perhaps by a big miner. Steel is softening. No change to outlook. Firm into end Q3 then down. World Steel reported June output: World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 151.4 million tonnes (Mt) in June 2018, a 5.8% increase
Iron ore price charts for July 24, 2018: Spot firmed. Paper too. Coking coal to the moon, gripped by Chinese stimulus fever. The new measures are not material in context. It’s growth slowdown support not a new credit boom (yet). It doesn’t change my outlook which I already lifted on better housing. It is for
Could not agree more. From the always excellent Damien Boey at Credit Suisse: CNY and US Treasuries weaken together Over the past few days, we have seen the CNY/USD depreciate sharply, and US Treasury yields spike higher. The two developments could be correlated. A weaker CNY implies that the PBoC is having to combat more
Never a dull moment with Cliffs managing director Lourenco Goncalves: “The shift toward higher grade is there to stay, the shift toward pellets is there to stay, and BHP and Rio Tinto are on the path to become the next Fortescue, and Fortescue is already on the path to become the next Atlas,” said Mr Goncalves
Iron ore prices for July 19, 2018: Spot up. Paper down. Steel firm. We’re still in the equilibrium. History is repeating for miners. We already have BHP, RIO, FMG and Vale all investing heavily in high grade output. Now India joins them, from Creamer’s: Information and data sourced from industry indicate that overseas shipment and
Iron ore prices for July 17, 2018: All prices are still running on the spot. The recent wave of Chinese data has lifted my expectations for the slow slowing of Chinese growth and thus bulk demand. Infrastructure is coming off hard: But it will be supported by OBOR exports. As well, housing prices and starts
Tianjin benchmark fell 50 cents to $63. Everything is more or less in equilibrium. Port stocks were flat on the week. Can the equilibrium hold? I don’t think so. Infrastructure is plummeting: It’s being offset by a bounce in realty and exports but for how long as credit tightens? By year end I expect
Iron ore prices for July 13, 2018: Spot flat. Steel firm. Paper flat. Rebar inventories fell 2.1% to 4.57mt, still well above last year and quite adequate. Steel exports held their rebound in June, I’m guessing on OBOR-related flows: Iron ore imports definitely appear to have topped: I reckon there’s a more than even chance