Find below the iron ore price charts for January 27, 2014: Rebar futures are bouncing along the bottom. Paper markets and spot have stabilised going into Chinese New Year as credit concerns ease as well. There is nothing terribly convincing about a rebound but markets are about to fall silent for the NY break. Port
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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Find below the iron ore price table for January 22, 2014: The charts: Rebar futures also lifted a little. Not terribly convincing as reversal but better than another fall! Macquarie yesterday confirmed my recent ruminations of tentative Chinese destocking: The latest Mysteel survey of iron ore inventory at Chinese steel mills shows an unseasonal destock
BHP’s December quarter production report is out this morning and is another reason to be leery of iron ore stocks today. Here’s the iron ore division detail: Iron ore – Iron ore production increased by 19 per cent in the December 2013 half year to a record 98 million tonnes. WAIO achieved record production of
Find below the iron ore table for January 21, 2014: The steady decline rolls on. There is no capitulation here yet. Reuters has some nice texture: Tighter access to loans and slow steel demand are keeping Chinese steel producers from replenishing iron ore inventories ahead of the week-long Lunar New Year break as they have done
From Gina Rinehart’s AFR today: Gina Rinehart has continued to tip millions into the Roy Hill iron ore project in Western Australia, as confidence in the project builds on the back of loans secured in December. Documents submitted to the Australian Securities and Investments Commission show that a subsidiary of Ms Rinehart’s Hancock Prospecting made
A note from Goldman Sachs today supports my bearish view on iron ore. GS sees a surplus of 80 million tonnes this year and cheaper Chinese supply than markets reckon, which will push the producer shakeout further and deeper: China: Growth moves inland and underground We investigate two sources of iron ore supply that are
Iron ore charts as at 13 January 2014: From the AFR, iron ore prices are set to fall as Chinese steel demand softens: Iron ore prices are forecast to soften in the short term amid seasonal weakness in steel demand, higher port inventories and growing seaborne supply. The iron ore price has eased slightly since
Iron ore charts for 9th Jan 2014. Not a great day for ore, but not unexpected as the seasonal slow-down in China ramps up and supply returns to normal. That, however, maybe the longer term dynamic of the market. From WSJ Iron ore may have outperformed other commodities last year, but the price of the
Iron ore charts for Jan 8th 2014 12M swap is still falling with spot following, while futures are up a pip. Steel isn’t looking good at all. From Reuters Chinese steel futures tumbled to a contract low on Tuesday, pressured by tepid demand and worries over a credit crunch in the world’s top consumer, putting
Sorry some technical difficulties this morning so only the price chart today. Not much movement, spot is still climbing but thay may change as supply returns to normal Ports in Australia’s resource-rich Pilbara region were returning to normal and loading vessels on Wednesday after suspending shipments and evacuating staff over the weekend as tropical cyclone
Iron ore charts for the 2nd January 2014 and a couple of stories. First to India where the government sanctions on iron ore are having a significant affect on the market. Top Indian trader MMTC’s $80 million iron ore export terminal, ready since 2010, has never handled a cargo. Now the company wants to spend
Iron ore charts for 31/12/2013, with the last day of the year showing continued stability. As Reuters points out, it’s supply concerns based around weather that are being kind to the market and bringing in a stable ending to the year Chinese iron ore futures extended gains to hit a two-week high on Monday amid
Iron price update for 30th Dec 2013 shows a nice bounce across the market. The short term reason? Weather. From the Oz THE price of Australia’s key export — iron ore — will start 2014 on a firmer footing as bad weather here and abroad hits the world’s largest producers of the steelmaking ingredient. Australia’s
The iron ore price tables for December 23,2013: Not much recent action. And Rio Tinto’s chief was having a plug at analysts over the weekend. From the Oz RIO Tinto chief executive Sam Walsh says erroneous forecasts that iron ore prices would slump to $US90 a tonne or lower this year showed that many analysts
An interesting counter-intuitive argument today from Mac Bank on iron ore for next year: On our current forecasts, we have more iron ore supply coming to market next year than demand. Given this new supply is generally low cost, the implication is that some existing, higher cost, suppliers will be displaced. Based on the current
The iron ore price table for December 19,2013: And in news, we have GS versus Rio: Rio Tinto Group (RIO) expects a decline next year in the price of iron ore, the source of most of its earnings, saying global supplies will increase. “There will be capacity coming on next year,” including at Rio, the London-based
The iron ore price table for December 18,2013 is below: It looks like Dalian futures are leading spot lower, at least for now. In news, Gina Rinehart is rumoured to be almost there with her public subsidies for Roy Hill: Gina Rinehart’s Roy Hill joint venture faces a pivotal 48 hours, with export credit agencies
The Bureau of Resource and Energy Economics (BREE) has released its December quarter commodity price forecasts and the news is good if you believe it with exports up 17% this year financial year to $205 billion (that’s up a billion and change from September’s forecast): The growth is driven largely by a $6 billion upgrade
Here’s the iron ore price table for December 17, 2013: Rebar futures were also hit. Here’s Dalian six month futures, which are still trading around $120 equivalent: The key level to watch is $131. Spot has not traded below that since July. If we break through, it’ll likely portend a deeper pull back. The BDI
Find below the iron ore price table for December 16, 2013: Given yesterday’s Flash PMI this is a pretty solid performance in paper markets. Then again, they fell so far on Friday that some retracement seems fair. Spot is weak. I’ve now got updated data from Bloomie on port stocks: My experiment of grafting Mysteel data