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.

Also Check – Australian Dollar

Find below our daily feed of market analysis


Rio dumping Simandou?

From the SMH: Global miner Rio Tinto has slowed progress of its multi-billion investment in Guinea’s untapped Simandou iron ore deposit and slashed staff, government sources in the West African country said on Monday. The sources, who declined to be identified because of the sensitivity of the topic, spoke after weekend talks between top Rio


Daily iron ore price update (bears in control)

Find below the iron ore price table for March 11, 2013: I definitely reckon the top is in for the year. Indeed, with the amount of negative press on Chinese growth, the shift towards soft-infrastructure stimulus and anti-real estate measures, downwards pressure is assured. On a slightly brighter note, Indian volumes remain offline and port inventories


Daily iron ore price update

Find below the iron price table for March 8, 2013: I would expect some weakness today on China’s pretty average weekend data print. Though fixed asset investment was the shining light which might save things. Apologies for brevity and lateness this morning . Data issues. Regular programming will resume tomorrow.    


BHP responds to China

From Reuters, BHP responds to China: “We aim to improve transparency by increasing liquidity in the spot market,” BHP said in a statement e-mailed to Reuters. “We sell significant volumes on a spot basis, including through widely accessible trading platforms, irrespective of the iron ore price,” it said. Spot market trades are used to set


China: Big miners manipulated iron ore price

Fresh off the presses this morning comes this from Bloomie: A recent surge in iron ore prices was caused by changes in demand, market speculation and “unreasonable” pricing methods, China’s top planning body said. Chinese steelmakers re-stocked iron ore during the traditional “winter reserve” period and ramped up purchases as confidence in the economy improved,


Rusty upgraded to Category 4 monster

The BOM just issued the following warning: TROPICAL CYCLONE ADVICE NUMBER 30 Issued at 5:36 am WST on Wednesday 27 February 2013 A Cyclone WARNING is current for coastal areas from Bidyadanga to Mardie including Port Hedland, Karratha and Dampier, and adjacent inland areas of the Pilbara, including Marble Bar, Nullagine, Millstream and Tom Price. A Cyclone WATCH


Rio hit with downgrade watch

Rio Tinto has been placed on downgrade watch today by S&P: Global diversified mining group Rio Tinto’s leverage has increased beyond our previous expectations. We see a risk that Rio Tinto’s debt may rise further in 2013-2014, unless the company makes large disposals or iron ore prices stay well above $120/tonne CFR China. We are revising our outlook


Kloppers choppers

From the AFR this morning the biggest job in Australian business has changed hands: BHP Billiton has appointed non-ferrous division head Andrew Mackenzie as its new chief executive, replacing Marius Kloppers as of May 10. The move comes after BHP reported the lowest interim underlying profits since 2005, but is unrelated to the fall in


Coking coal price firms

Newcastle thermal coal prices fell slightly. The strike at Colombia’s Cerrejon mine continued into its second week with a resolution between Cerrejon, the Government and miners yet to be reached. Uncertainty over the strike, impacting about 30 million tonnes of thermal coal exports into the seaborne market, may have contributed to choppy trading over the past week. Meanwhile, coking coal spot


Daily iron ore price update (Rio is Fortescue)

No movement yesterday in the iron ore complex. The big news today is Rio’s earnings release (find it below) which confirms that the company is a ragingly successful iron ore company buried under a huge pile of…overmatter…to make it appear diversified and unattractive to suiters. The iron ore division contributed 44% of group revenue but…wait