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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Daily iron ore price update (bear market rally)

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


Mt Gibson: Iron ore grade discounts structural

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,


Daily iron ore price update (China slows)

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


Fortescue breaks support

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


Daily iron ore price update (the deadest of cats)

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


When Andrew met Pauline

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


Daily iron ore price update (wake in fright)

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 discounts to disappear as it crashes?

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


Daily iron ore price update (new lows)

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.


Cliffs shuts WA iron ore mine

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