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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Here is the iron ore price table for February 1, 2013: And chart: So, no sooner have swaps broken out than they’ve scuttled back under cover. No movement in Chinese steel prices. But the futures market was different with rebar futures piling it on again: My spread charts still look seriously sick. Spot to swap
Find below the iron ore price table for January 31, 2013: And the chart: So, once again defying the doomsayers, 12 month swaps for the miracle commodity have broken out to a new high for the move and put a rocket under spot. More support was found in rebar futures (though no move in spot),
Find below the iron ore complex price table for January 30, 2013: And the chart: 12 month swaps broke out to a new high, just, and not yet decisive. The ANZ view, however, is for short term weakness: Despite a 6% fall iron ore prices in the past three weeks, we think the ensuing Chinese holiday
Here is the iron ore price complex table for January 30, 2013: And the chart:
Courtesy of ANZ: April Newc coal prices rose USD1.50 to USD94.75/t, while spot coking coal traded at over USD167/t after flooding in Queensland’s coalfields. The Bowen Basin was hit by between 200 and 400 millimetres of rain, but the disruptions are not as widespread as the “Big Wet” of 2011. Even so it may take several weeks for operations to
Here is the iron ore price table for January 26, 2013: And the chart: Plus Chinese steel prices: The only worthwhile point is that 12m swaps again retreated from resistance. Unless or until it can move through the mid $125s, the orientation for the spot price will most likey be lower.
Find below the iron ore price table for January 25, 2003: And the chart: Steady recovery in spot and swap still balking at resistance. This has left my spread charts just as broken. Spot to swap signaling tension between the short and long term view: And spot to rebar signaling a complete disconnect between ore
Courtesy of ANZ. ANZ Commodity Daily 764 250113.pdf
Atlas iron delivered its December quarter production this morning more expansion is in the offing: Another 12 million tonnes of capacity by year end. atlas.pdf
Find below the iron ore complex price chart for 24 January, 2013: And the chart: Another slow day on the hustings with swap balking at its former high and spot still showing strength, apparently on Pilbara weather and some strength in Baosteel contract prices. In news, today’s point of interest is the shorts of David
Here are the highlights of FMG’s December quarter production report: By year end that is another 100 million tonnes online versus two years earlier, all of India’s fading capacity available from just one firm. When I wrote my 2013 forecast piece I was not aware that FMH had renewed its Kings push. Combined with Rio
Courtesy of ANZ. ANZ Commodity Daily 763 240113.pdf by Belinda Winkelman
Here is the iron ore price table for January 23, 2013: And the iron ore price chart: Of note is the push by 12 month swaps towards a new high for the move, just 30 cents shy. Such would signal the recent correction over. In news today, there is a red hot investigative story from
From the AFR: BHP Billiton is on track to deliver an average of 10 per cent annual volume growth to the end of the 2014 financial year after reporting strong production in the December quarter. The miner beat expectations for iron ore production in the December quarter by more than 1 million tonnes, with Pilbara
Find below the iron ore complex price table for January 22, 2013: And the chart: Not much to report, clearly. The big news overnight was the release of December world steel production figures and thus for the year as well: World crude steel production reached 1,548 megatonnes (Mt) for the year 2012, up by 1.2%
Find below the iron ore price complex table for January 21, 2013: And the chart: The big news overnight is that Indian ore continues to slide down the top exporters list. From Reuters: South Africa overtook India to become China’s third-biggest iron ore supplier in 2012, while Australia strengthened its dominant position as the major
Following in my footsteps, the AFR has a good piece today from Deutsche’s Adam Boyton on the both the importance and price of iron ore: …if iron ore prices were to hold at the $US158 a tonne level seen a little over a week ago, interest rates could end the year higher than they are now
Find below the iron price complex price chart for January 18, 2013: And the price chart: My view of the Chinese data dump on Friday was that it was bearish for iron ore, given the failure of fixed-asset investment to push upwards: The AUD agreed, down sharply from the release right through Friday’s northern hemisphere
Find below the iron ore price table for January 17, 2013: Not much to add on a quiet day, except to note that 12 month swaps are doggedly hanging on to the $120 support price: This bodes well for my $130+ first half price forecast. But onto the news of the day that matters. Rio
Here is the iron ore price table for January 16, 2013: And it is farewell froth time: So, clearly the Chinese restock is done for now. Swaps are holding the line at the $120 support and I expect this correction could take us all the way back into the $130s, with ongoing repairs to my
Here is the iron ore price table for January 15, 2013: And the chart: Nothing startling here as the correction from recent highs continues. The bull trap thesis got a boost with swap punching back through its $120 support: Of greater concern, however, was the softening of rebar and billet prices which are struggling to
Here is the iron ore price table for January 14th, 2013: And today’s chart: Not much to add after yesterday’s epic, except to say that 12m swap has bounced nicely off its $120 support level: Mildly bullish but I’d be surprised if the short correction for spot is over already.
Hello dear reader and welcome back to us both! And so, to the topic at hand, the miracle commodity and its ripping rally. Here’s how I finished 2012: So, is it sustainable? My guess is it’s a bull trap but I have no idea. As I wrote last week after the breakout, when a market
By Leith van Onselen The biggest news over the festive break was the ongoing surge in iron ore prices, which have risen by more than $US30 per tonne since December. Iron ore is Australia’s biggest export commodity (see below chart) and any increase in prices flows directly into national disposable income, boosting company profits, government
I’ll keep this short, as I’m not feeling the best today, but it’s hard to resist covering some rare good news for the Australian economy through the mist of recent dour data. From morning links China steel futures hit their highest in more than six months on Monday, backed by a revival in demand in
Find above the iron ore price complex chart for December 17, 2012. This will be my last post of the year, returning January 14th. Here is the spot/swap price chart: So, it’s a Christmas gift for Australia with iron ore surging to new post-bust highs. If the price can hold at these levels for three
Courtesy of ANZ. ANZ Commodity Daily 761 141212
Find above the iron ore price complex table for December 13, 2012. As I said the other day, once free and twirling who knows where it ends? All I can do is point again to my spread charts, which are screaming over-bought. Spot/rebar: And spot/swap: For these spreads to make sense in terms of recent
Find above the iron ore price complex table for December 12, 2012. Stability but for how long? While I no longer put much faith in it, yesterday the Baltic Dry tanked 8% almost exclusively on tumbling capesize (used for the bulks) rates, which is a bit of a eye-opener: In other news, yesterday BREE upgraded
Courtesy of ANZ. ANZ Commodity Daily 759 121212
