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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The AFR is happily pumping the Macquarie Bank view of equities today: It had to happen some time. Or, that is, it had to keep happening. Tanya Branwhite continues to tweak Macquarie’s recommended Australian portfolio away from yield and toward growth. And to underline the point, the broker has reduced its exposure to Telstra, and increased its weighting
Slowly but surely the better minds of Australian market economics are turning up the pitch of worry. NAB has completed a very useful analysis of the last week’s BREE major projects report and the results are no different to my own assessment: frightening. However, the detail is interesting. First is iron ore: Overall, the value
Courtesy of ANZ: Coking coal prices continued to fall, down to USD142/t, while iron ore prices remained flat. The preliminary HSBC PMI results set a bearish tone for industrial metals. Iron ore port stockpiles in China rose slightly last week to 72.5mt, but still remain significantly low compared to recent years. Iron ore traders are
Credit Suisse has a new note out on iron ore this morning that I agree with as an optimistic scenario for iron ore. First it sees the current breakneck pace of Chinese steel production to slow: Housing and construction activity already show signs of leveling out, not least because price inflation continues to bug Beijing
BHP held an investors round table yesterday and it produced a few interesting iron ore snippets. From Citi: WA Iron Ore is on track to deliver 220mtpa by mid-14, with an unapproved US$1b expansion of Jimblebar likely to take that to 240mtpa. To reach 300mtpa an additional mining hub, in-load capacity and berths in Port
Find below the iron ore price table for May 22, 2013: In news today, Deutsche is out with a new report predicting another 8% drop in spot. From Businessweek: Steel prices that have been pressuring Chinese mills are stabilizing as facilities shut down due to power shortages in Hebei province, and more will close for
Find below the iron ore price table for May 20, 2013: In news, it appears the large steel inventory build, poor sales and shifting context of structural change has once again spooked Chinese steel mills. From the FT: Analysts said that the past week’s tumble in prices had been caused by an outbreak of bearish
From ANZ: Iron ore prices ended the week with a 5% drop, the sharpest fall since mid-March when China’s growth expectations for this year were reduced. Iron ore prices are now sitting around 6-month lows and remain under pressure from the weakness in Chinese steel prices. Coking coal prices also posted the 4th consecutive week
Find below the iron ore price table for May 17, 2103: Rebar futures bounced. Here’s the spot and swap chart: The next chart support is in the $118-$120 area. Looks like we’re going to test it, as previously discussed. Meanwhile, as promised, here are my spread charts. Both remain stretched, with iron ore to swap
Find below the iron ore price table for May 17, 2013: At $15, the 12 month swap to spot spread has returned to historically consistent dimensions for this price range. The spread to rebar remains very wide. So, either both iron ore prices keep falling or rebar keeps rising if the reversion to mean is
By Leith van Onselen From the AFR this afternoon comes news that Chinese steel mills have been re-selling iron ore bought under long-term contracts into the spot market, helping to explain why spot prices are at a five month low, 20% below their 2013 peak: China’s steel producers are selling some iron ore cargoes back
Find below the iron ore price table for May 15, 2013: Rebar futures also sold off sharply. Looks like we’re headed for a test of $120 “price floor” and charts would suggest $110 is the next support level. Iron ore got some good news from analysts yesterday when Morgan Stanley argued that ore will remain
Find below the iron ore price table for May 14, 2013: Looks like we’re going to test $120. I’m still not overly bearish. All of that Chinese credit growth has to support something! In news today, the Australian Budget is slowly coming to terms with reality. From the AFR: It may be this year’s single
I noted this morning that Indian sourced iron ore inventories at Chinese ports appear to rising again. There is further news flow suggesting India may be set to resume substantial exports by December. From the Business Standard: NEW DELHI (Reuters) – Goa expects court approval to resume by year-end the production and export of iron ore
Find below the iron ore price table for May 13, 2013: Rebar futures were up slightly. Chinese port stocks edged up again last week to 75.6 million tonnes. Indian source stocks rose again also, up to 18 million tonnes. Whatever the cause, some Indian iron ore appears to be seeping back into the market.
Find below the iron ore price table from May 10, 2013: Not much movement, clearly. Last week I didn’t bother reporting on BHP statements that it expects iron ore to fall. After all these were not new. But some new detail of the giant’s comments is available and is interesting: BHP on Wednesday confirmed
Jeez. What a dreadful state the AFR is in. Its iron ore coverage today is as ignominious as it is wrong. First up, the obsequious “Boss” magazine, whose primary role is to myth-make around CEOs as Nietzschean ubermensch, does a spectacular lipstick job under the title of “How Nev Power saved Fortescue”: NEV POWER should have
Find below the iron ore price table for May 9, 2013: Rebar futures were down slightly. In news, the WSJ reports that Indian iron ore will remain offline for the foreseeable future: India was once the primary source of spot-market iron ore for China, the world’s largest consumer. But its share started to decline 18
From the AFR comes news that London fund managers are pressuring Rio: The so-called “360” project entails the approval of up to $US5 billion of spending on new mines needed to match port and rail capacity improvements that have already been approved. It would lift Rio’s annual production by 70 million tonnes from the 290 million tonne capacity
Find below the iron ore price table for May 8, 2103:
Find below the iron ore price table for May 6, 2013: And the charts. For spot: 12 month swaps: So, we have a bounce but it so far failed to undo the technical damage to charts enough to conclude last week’s plunge was a false break. Rebar average: And rebar futures: It looks to me
Find below the iron ore price table for May 3, 2013:
Find below the China steel PMI for April courtesy of Bloomberg: After the wild fluctuations of the past few months, stability certainly suggests that restocking cycles are done. However, there is nothing terribly exciting in the figures. Output, new orders, new export export orders are all still falling. In better news, inventories have started to