Iron ore price charts for January 22, 2018: Tianjin benchmark fell 95 cents to $75.90. Paper is soft. Steel firm. Port stock hilarious, up another 1.57mt to 154.4mt. Reuters sums it up: Record stockpiles of iron ore at China’s ports could produce steel for 107 million cars — more than three times the country’s annual
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 charts for January 18, 2017: Tianjin benchmark rose 50 cents to $74.85. Paper was stable. Steel firmed. Chinese data last night showed the impact of Winter shutdowns: The precipitous nature of these output pullbacks suggests firmly that we’ll see some pent-up demand when the restrictions are lifted in late March. That suggests that
Via Vivek Dhar, Mining and Energy Commodities Analyst at CBA: “We still anticipate iron ore prices to fall later this year on surplus concerns,” he said in a note released today. “Chinese iron ore supply, which is the most expensive in the world due to its low grade, will be key to this outcome.” Dhar
Iron ore prices for January 17, 2018: Tianjin benchmark fell another $1.25 to $74.35. Paper has stopped sliding for now. Steel is firm. In news, Samarco is back in the news: Vale (NYSE:VALE), the world’s largest iron ore producer, confirmed Wednesday it is in talks with BHP Billiton over the future of their Samarco joint
Iron ore price charts for January 16, 2017: Tianjin spot fell 90 cents to $75.60. Paper firmed a little overnight. Coking coal was hammered. Steel is stable. CISA output at major mills roared back 3.6% in late December. The last point may prove very important for the timing of the coming price correction. If pollution
Via RIO today: Pilbara operations produced 329.8 million tonnes (Rio Tinto share 271.3 million tonnes) in 2017. Fourth quarter production of 87.9 million tonnes (Rio Tinto share 72.9 million tonnes) was three per cent higher than the fourth quarter of 2016, reflecting the implementation of productivity projects across most sites. This strong performance was achieved
Iron ore charts for January 15, 2017: Tianjin benchmark fell $1.80 to $76.50. Paper firmed overnight on the plunging USD. Steel eased. No need to adjust your TV, ports stocks did rise another 4.83mt last week to an astonishing 152.83mt. I’ll simply render this nice chart which shows the correlation between the Chinese housing and
Iron ore price charts for January 12, 2017: Benchmark spot fell 1% to $78.30. Futures fell. Steel fell. Direction over the next few months will hang on Chinese restocking and Pilbara weather. Given the La Nina and the early year big steel build it is wise to expect price firmness through Q1, as said last year. But,
Here’s the latest price update from the iron ore complex: A relatively quiet session yesterday with the Tianjin price at $78.50 A bit of weather on the way to help delay some shipments could bolster the price a bit longer. From Reuters: Vessels may be cleared from Australia’s Port Hedland, the world’s biggest iron ore
Here’s the latest price update with futures at their highest levels n four months as speculators continue to react to moves by Beijing to tighten up on implementing steel production capacity cutbacks: Meanwhile iron ore exports from the Port Hedland terminal are at 46.2Mt, up 5% year-on-year. More from the Mining Journal: Total iron ore exports from Port
The Department of Industry, Innovation and Science have released their latest report and forecasts into commodities, doubling down on the “small correction, then steady plateau” meme. From the ABC: In 2018-19 earnings are forecast to fall to $200 billion, driven by declining iron ore and metallurgical coal prices. The expected 7 per cent fall in export earnings
Here’s the latest price update from the iron ore/metal complex: Rises across the board with the Tianjin spot price also jumping above $77 yesterday. The thrust in steel related pricing is due to a new set of guidelines issued by the Chinese industry ministry on Monday to ensure the governments policy on reducing steel capacity
Here’s is the latest price data from the iron ore complex: Spot iron ore prices have put on nearly 6% since the start of the calendar year, but there’s some spillage coming out of the Chinese steel industry, with steel future prices falling on Friday on the back of falling demand. Texture from Reuters: “The
Here’s the latest price update for the iron ore complex: The Tianjin port price was $75.20 Meanwhile, big extractor Vale looks like splitting with BHP Billiton over their Samarco venture, possibly buying out the Big Not Australian. More from Reuters: A price has not yet been established for any buyout and it would depend on
A new year starts for the iron ore pricing complex, here’s what happened yesterday: Seasonality is coming into play with stockpiles of rebar held by Chinese traders rising for a second week to 2.973 million tonnes, up 1.5 percent from a week ago, according to SteelHome. Here’s the latest roundup of analysts views on
So what happened with the iron ore complex over the Xmas break? It was very thin trading with not much action, some dips in coking coal and rebar prices, but these have come back slightly: Tianjin benchmark was roughly the same as Qingdao at $72.70 on Friday. The 2018 forecasts from the investment houses are slowly trickling
Iron ore price charts for December 20, 2017: Spot flat. All futures up as steel prices bounced back from two-week lows. Here’s some commentary from Hellenic Shipping News: “Some mills are buying depending on their weekly demand, there’s no rush,” said a trader in China’s southeastern Shandong province, on the current appetite for iron ore
Iron ore price charts for December 18, 2017: Everything up. The AFR provides some context: Chinese steel mill profit margins are driving the market. Chinese steelmakers have cut production after the government ordered industrial plants in 28 cities to slash output between mid-November and mid-March to reduce air pollution… However, there’s still the problem of climbing port
Iron ore price charts for December 15, 2017: Spot up. No need to adjust the TV, paper was limit up Friday night courtesy of a Trump tax frenzy. Steel is stuck. Most importantly, port stocks continue to climb, up another 900k tonnes to another all-time record at 142.6mt. This is the key driver of prices
Iron ore price charts for December 14, 2018: Tianjin benchmark rose 40 cents to $70.10. Paper is faltering. Steel is falling. Yesterday’s China data saw steel production fall heavily on Winter shutdowns in November: But cement remained very strong: I think what we’re seeing in these numbers is that supply has been hit harder than
Iron ore price update for December 13, 2017: Tianjin benchmark rose 10 cents to $69.70. Paper is stalled. Steel soft. On the last, here’s the latest on Chinese steel inventories courtesy of UBS: Low but the same as it’s been for three years now. Not overly important unless the Winter shutdowns inhibit the NY
UBS giving the miners a lift today: UBS VIEW China’s property & infrastructure construction boom will slow in 2018e & 2019e, but we don’t expect a collapse, because i) slowing is by policy (tightening) design, ii) property inventory drawdown means developers will be building a higher share of (flat to lower) sales than last year,
Via UBS: China’s crack down on pollution is a major driver for commodities As detailed in our note, we expect China’s focus on reducing air, land, and water pollution to be a major driver for commodities, and in turn mining stocks, both near and long-term. UBS Evidence Lab uses multiple sources to provide unique visibility