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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5

Mapping iron ore’s doom

Yesterday Australia received some very, very big news. It wasn’t reported because it’s pretty scary. Goldman summed it up nicely: NBS released the key results of the 7th population census today. Overall population in China reached 1.412 billion in 2020, an average growth rate of 0.53% yoy from 2010 to 2020; in comparison with the

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Daily iron ore price update (China census demographic doom)

The ferrous complex calmed down a little yesterday after Chinese regulatory intervention but oftentimes it takes more than one hammer to hit the iron ore nail so expect further moves. Spot eased. Paper firmed overnight. Steel waltzed straight through: In data new, Brazilian April exports were soft as expected, up only 7.5% over the year.

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China drops jackboot on LNG, iron ore trade

Australia’s China divorce hits another milestone today. Following recent Morrison Government warmongering and ripping up VIC’s BRI deal, the blowback has arrived as the next commodity to be targeted is LNG: Two Chinese importers have been told to avoid Aussie LNG. China imported 29mt in  2020. About 10mt of that is above contract obligations. Recall

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Morrison warmongering to crush or rush iron ore?

Recent Morrison Government warmongering took a breather yesterday after the CCP struck back by suspending the China-Australia Strategic Economic Dialogue. Frankly, the dialogue has been dead for four years anyway so this rather suggests that Beijing has run out of levers to pull. Ahead, Australia will likely cancel Andrew Robb’s treasonous Darwin port deal as

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Daily iron ore price update (Fortescue to the moon)

by Chris Becker The iron ore complex took a bit of a breather yesterday as spot prices were unchanged while Dalian futures pulled back, rebar continues to rise as demand for steel in China reaches new highs: Meanwhile its a continued boon for Australia with iron ore exports underpinning the post-COVID recovery, and in fact

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Daily iron ore price update (record exports)

by Chris Becker Spot iron ore retreated ever so slightly yesterday from its record high but still above $190 per ton while futures settled down from their recent frothy highs, but its sure to be short term: With another record trade surplus, exports of iron ore have been booming with over $14 billion launched overseas

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Daily iron ore price update (stabilisation wanted)

by Chris Becker Yet another record high in iron ore prices yesterday as spot prices barrel in on the $200 level, while rebar and coking coal futures took a breather, as calls begin to mount to “stabilise” the market. Demand continues to drive price, according to S&P Global Platts: “What we are witnessing is the

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Daily iron ore price update (moar demand)

by Chris Becker More new highs for the iron ore complex yesterday as “structural contradiction of supplies and a shortage in medium and high-grade products” continue to elevate the primary product to ever new levels. Here’s the price table: And charts: Texture from Reuters as this commodity supercycle keeps benefiting from the “brrr” of the

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Vale misses but iron ore flood on track

Vale is out with its Q1 production report. Vale’s iron ore fines production totaled 68.0 Mt in 1Q21, 14.2% higher than in 1Q20, as Vale progressed on its operational stabilization and resumption plan. The year on year growth is attributed to: (i) the gradual resumption of halted operations in Timbopeba, Fábrica and Vargem Grande complexes

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Chinese bond market seizure to smash iron ore?

One of the less well-understood dimensions of Chinese economic restructuring is the travails of its corporate bond market. For a few years now, authorities have been slowly removing the moral hazard that has dominated Chinese debt markets through its development phase. This causes periodic panics in financial markets but it should not. This is an