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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Daily iron ore price update (more support)

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

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Iron ore prices twirl higher

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

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Iron ore twirls higher

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

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Daily iron ore price update (twirling, twirling, twirling towards freedom!)

Find above the iron ore price complex chart for December 11, 2012. Here is the ore chart: And steel chart: Pretty clearly, spot iron ore has broken free of fundamentals, associated prices and all sense, twirling, twirling, twirling towards freedom! My spread charts are now registering dangerous over-stretch for this price range. Swap versus spot:

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Daily iron ore price update (new high)

Find above the iron ore price complex chart for December 10, 2012. The recent Chinese data seems to have suddenly convinced traders that Chinese rebalancing is a sham. Not without justification. The data flow showed pretty clearly that it is more investment that is driving the rebound in growth. Still, the move is highly speculative.