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 price table for December 13, 2013: And the charts: Rebar futures were down sharply, however. Six months Dalian futures were smashed to their lowest point: So what happened? From Reuters: A number of steel mills in China’s top producing province of Hebei have been ordered to shut some of their facilities
Here is the iron ore table for December 12,2013: We have clearly hit “the wall”. The last few days of data have shown steel production falling away. From Reuters on Tuesday’s output figures: Slower demand cut China’s daily average crude steel output by 3.3 percent from October to 2.029 million tonnes last month, government
The SMH is reporting that more coal jobs are going today: Attesting to the tough slog for the coal export industry, the Indian-controlled troubled NSW southern field producer Gujarat NRE Coking Coal, is to axe 90 jobs – a 20 per cent workforce cut. It said natural attrition should make up the bulk of the redundancies. The
Minimal changes yesterday:
Find below the iron ore price table for December 9,2013: Rebar futures are also in a steady uptrend.
Find below the iron ore price table for December 6, 2013: Port stocks rose another million tonnes to 85.4mt last week: In news, from Xinua: China’s crude steel consumption for 2013 is estimated at 693 million tonnes and it is expected to grow 3.2 percent year on year to reach 715 million tonnes in 2014, an industry expert said on Friday. Given China’s current production capacity, the debt-laden steel industry will continue to struggle with overcapacity, said Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute. China is the world’s biggest steel consumer and producer. In the last several years, China’siron and steel sector has been pummelled by weak demand and falling prices and suffered greatly from overcapacity. Li said decelerated growth of downstream sectors, including machinery, electricalappliances and containers, is the major reason behind the slowdown of steel consumption growth in China. China’s steel demand in 2014 is set to edge up marginally, as the Chinese economy is unlikely to have a significant turnaround next year, he said. According to Li, of the eight downstream sectors that determine steel demand, the railwayand automobile industries are expected to post the biggest growth in steel consumption in 2014, forecast at 8.3 percent and 8.0 percent year on year, respectively. Steel demand next year from machinery and household appliances is expected to rise by 5.3 percent and 5.0 percent year on year, respectively. Steel demand from the energy, construction and container sectors is likely to edge up slightly. Steel demand from ship-building could stay flat in 2014 due to the depression of the global shipping market. Li also said that the world’s iron ore prices would remain high next year. China’s demand for finished iron ore in 2014 is forecast at 1.172 billion tonnes, with more than 70 percent imported. One wonders
Ah, the boot is on several other feet this morning with Rio accusing the WA Liberal Government of a secret plan to hike royalties: Promoted as a consultative and lengthy review process, the Colin Barnett-led government’s royalty rate assessment is coming under increasing criticism for allegedly having a pre-determined outcome that is designed to plug its
Find below the iron ore price table for December 5, 2013:
From the AFR. Clive Palmer’s Supreme Court challenge to shut down Sino Iron is not going so well: …Justice Edelman said “Mineralogy imposes a time table which, to be frank, is absurd.” Until this week, Mineralogy’s lawyers claimed there were outstanding royalty payments linked to 19,000 tonnes of already extracted magnetite…Mineralogy changed its legal approach
Find below the iron ore price table for December 4, 2013: There’s a pretty decent rally in the offing here I reckon. Rebar has stabilised even if it’s still low. The year end restock is underway in preparation for the Q1 steel inventory build and cyclone season disruptions, Chinese data is motoring along fine. I’m
Find below the iron ore price table for December 12, 2013: All green and the charts have broken out with 12 month the highest since March: If spot can get through $142.80 we’re off to the races on the restock for the first quarter of next year. Good odds. In news today we have November
The iron ore price table for December 2, 2013 is below: No news today but I will observe that the swaps market is steadily repricing 2014 iron ore contracts upwards currently. We haven’t quite broken to a new high yet on the twelve month but it’s close and the trend looks firm.
The AFR has another bullish iron ore take this afternoon: Commonwealth Bank senior economist Michael Workman said market expectations had wrongly indicated the iron ore price would be 10 to 20 per cent lower than its current value. “The iron ore price has held up at much higher levels than people thought were possible,” he said.
Find below the iron ore price table for November 29, 2013: Stable again. Charts: The interesting news on the week’s data is again about port inventories, which climbed another 2 million tonnes to 84.15 million tonnes: The recent up trend is starting to look impressive. Mills days of inventory are stuck at around 30 days
Credit Suisse has a little note out on Chinese steel production: Though some idiosyncratic factors – such as mills’ debt capacity being assessed in part on their current output – have incentivized higher runs this year, in the main we see credit expansion and consequent construction sector strength as having underpinned this year’s c.8% increase
Yesterday’s iron ore price rose 0.3% to $US136.40 per tonne. 12 month swaps are up a bit too at $117.02 and rebar average was flat. News today is all about Rio Tinto last night delivering on Pilbara 360: Under the plan, Rio’s iron ore production is expected to hit 290 million tonnes a year by the end of
Yesterday’s iron ore price rose slightly to $136, 12 month swaps fell slightly to $116.94: Rebar average rose a bit to 3536: Not much news but I wanted to quickly observe just how long and spooky this period of calm pricing has bee. Here’s a longer term chart of spot and swap: There is no other
The iron ore spot price fell yesterday 0.4% to $135.90. 12 month swaps eased a touch to $117.08. Rebar average resumed falls at 3529. News today is all about Rio. From the AFR: Rio Tinto is expected to update investors on its multibillion-dollar iron ore expansion plans next week amid predictions the global resources company
No change in the spot price yesterday with it still at $136.50. In news, low and behold, BHP is investing some money in the last commodity standing: BHP Billiton is a step closer to its long term goal in the Pilbara, after announcing $US301 million worth of new spending today. The global miner will spend
The iron ore price table for November 22, 2013 is below: The spooky stability of spot continues and you may have noted as well that 12 month swaps a re drifting up towards $120. Rebar appears to be flattening out so there ‘s easing concern that falling steel mill profitability will trigger a destock. What
Find attached the iron ore price table for November 21,2013. Ignore the rates of change (I’ve still got some data issues):
Not new but worth repeating. From the SMH: Iron ore, gold, soybeans and copper will probably drop at least 15 per cent next year as commodities face increased downside risks even as economic growth in the US accelerates, according to Goldman Sachs. The risks are strongest for iron ore, and follow increases in supplies, analysts including
The iron ore spot price for November 20, 2013 was up slightly to $136.40. Got a few data issues today so no more figures. In news the World Steel Association released its October figures which are, in a word, strong: World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel)
The iron ore prices for 19th November included a 0.5% fall in spot to $136.50. 12 month swaps rose a few points to $116.50. Rebar average fell marginally to 3538 but futures rebounded off support.
From the AFR this arvo a few insights into mining costs: New Hope chief executive Rob Neale said the downturn in the coal industry had yet to bottom out, saying the tough conditions were expected to remain for the next few years. I agree. Despite the bounces in recent months, which have mostly been about
Find below the iron ore price table for November 18, 2013: In news today, Reuters explores Dalian futures: China is making its third attempt in two years to have a bigger say in pricing iron ore. This time it may have hit on the winning formula. Brisk trade in the first month on Dalian iron ore futures brings Beijing a
From the AFR: Downer EDI has been awarded a four and a half year contract worth $500 million with Roy Hill Iron Ore for early mining services at the open cut mine in the Pilbara, Western Australia. Under the contract, Downer will be doing pre-strip and supplementary mining activity over the initial years while Roy
Find below the iron ore price table for November 15, 2013: And the charts: Rebar is rolling over. Futures have plunged and are threatening a new low: So, again, we have the dichotomy of weak fundamental demand and strong iron ore prices asserting itself. Some can be explained by renewed hoarding activity at ports. Last
Funny how the world works. From Bloomie: The board of the U.S. Export-Import Bank, an independent federal lending agency, gave preliminary approval for $694 million in financing for billionaire Gina Rinehart’s Roy Hill iron ore project in Australia. The vote by the lender’s board today will support the purchase of mining equipment from U.S. companies including
Find below the iron ore price table for November 14,2013: And the charts: Rebar futures fell sharply and suggest the rally in steel prices is done.
