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

Find above today’s iron ore complex table. Here are the charts. Spot and 12 month swap: The spread between them is running out of room for this price level: If you think about it, the spread makes a fair amount of sense. Current iron ore demand is boosted by restocking and Chinese leadership transition hopes.


RBA on steel and iron ore

This morning’s SoMP may have been a dead bore but there was one interesting breakout box about China’s steel market and iron ore demand. It keeps up the pretense of endless Chinese demand (which we can take with a grain of salt) but some of the details are useful. Enjoy. rba steel


Daily iron ore price update

Find above today’s ore price complex table. In wider news, Reuters offered a good snap shot of the dynamics in the market overnight: “Most takers of cargoes are traders who are trying to keep the market up, expecting some good news for the steel sector to come out from the China congress,” said a Shanghai-based iron ore trader.


Oakajee bites the dust

From the AFR: The future of the $6 billion Oakajee Port and Rail project in Western Australia has been cast into further doubt, with Japanese owner Mitsubishi to freeze spending and pare back its workforce on the troubled venture. Mitsubishi’s efforts to reinvigorate the project have been stymied by weakening iron ore prices, ongoing global


Daily iron ore price update

Here is yesterday’s iron ore price. It’s a war between the 12m swap, which rightly does not want to budge and the spot price, which just as rightly wants to rise. Here’s where we’re up to on the spread between them: I’m still thinking that yesterday’s Indian news will be enough to push spot higher


Daily iron ore price update

Little change to today’s iron ore complex but our spread is now plus $10 between spot and 12m swaps. One is going to give shortly. In news, Mitsui sees a $100 price floor in the year ahead: “I think we saw the floor of it in the second quarter” ending Sept. 30, Iijima of Mitsui &


All together now: China forever!

Find below the new “Aussie Mine” report from PWC, an annual assessment of the landscape and prospects for the mid-tier Australian miners. I don’t recommend reading this for any other reason than the good laugh available in the assessment of China from pages 3 to 7. If ever there was a report that captured the


RBA Index of commodity prices dumps again

The RBA’s index of commodity prices for October is out and continues its recent dump. If you’re wondering why since iron ore has been powering it’s simple, longer term coal contracts are now getting lowered following falls earlier in the year: Preliminary estimates for October indicate that the index fell by 3.5 per cent (on a monthly


Heavy falls for coal export volumes

Courtesy of ANZ: Iron ore prices improved slightly after China flash  manufacturing data showed an improvement. However,  thermal and coking coal markets continue to track sideways  on weak China imports. China’s combined coal imports in Sep  showed a 22% y/y decline to 14.9mt. Thermal coal imports  declined 18%y/y to 12.4mt in Sep 2011, while coking


Daily ore price update

Here is today’s iron ore chart: Definitely looks like the spot market wants to test the $120 ceiling. 12 month swaps aren’t co-operating and the contango is gone but the spread has often been much wider than this so that may not hold spot back: As I’ve said, though, anything over $120 now has highly


Daily iron ore price update

All quiet on the Westoren front today. Not much else to read either beyond a bit bullish blather from UBS: Iron ore will probably advance this quarter to levels last seen in July as steelmakers in China, the biggest buyer, rebuild inventories on speculation that the country’s pace of economic growth will pick up, said