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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Iron ore prices for June 11, 2020: China’s recovery still looks crap: Outside of empty apartments and bridges to nowhere of course: And Brazil looks disastrous: The iron ore bull case is intact but will probably get sucked into the broader markets vortex in the short term.
Via Reuters: The office that enforces labor laws in Brazil’s Para state has stepped up an investigation into potential shortcomings in mining giant Vale’s efforts to protect workers from the coronavirus, authorities said on Wednesday. The federal labor prosecutor’s office in Para has an internal working group in place known as the GEAF to monitor
Iron ore prices for June 10, 2020: Some pullback across the board which always happens in June: Platts does not think it will get far this time: Rebar inventories have started to build in southern and eastern China as the rainy season slows construction activity, but steel prices are unlikely to fall sharply as the
Iron ore prices for June 9, 2020: Not much change in things. Chinese data is still crap, excepting empty apartments: Brazil’s virus data is on the weekend but is still rising week over week: Up remains the path of least resistance for iron ore, notwithstanding short term seasonal headwinds. Longer-term it’s the opposite, via Reuters:
Iron ore price for June 8, 2020: Chinese steel exports in May were awful at 4.4mt: Iron ore imports weren’t great either at 87.03mt but the rolling annual hit its highest in two years: The Chinese recovery looks completely stalled out: But all that matters is Brazil: At least, that was all that mattered: Brazil
Iron ore prices for June 5, 2020: Spot took off Friday. Paper as well. Port inventories of iron ore are still falling, down to 108mt. CISA steel output hit outrageous all-time highs above 2.09mt for the late May fortnight. The industrial base in China is stuffed, leveling off at 90% output. And that is being
Iron ore prices for June 5, 2020: Not much in news. Brazil is still awful: Chia is leveling off at 90% industrial recovery but realty is the main game: UBS offers a few charts that capture where we are: The steel mountain has not adjusted at all so mills could cut production at any time
Yep. Via UBS: Iron ore appears well-supported by current tightness The iron ore price (62% CFR China) has averaged US$89/t YTD with spot now over US$100/t and above our CY 20e forecast of US$86/t. We are comfortable with our forecast based on 1) a strong recovery in Vale iron ore production which will require a
Iron ore prices for June 5, 2020: We’ve stalled for now. Chinese indicators appear to have settled at around 90% capacity recovery in everything except building: Brazilian supply remains the key story. Virus to the moon: Iron ore shipments seriously struggling: Vale is going to have to warn again. And other problems: June is seasonally
Iron ore prices for June 2, 2020: AFR has a great story today: The Brazilian company at the centre of the iron ore price rally says its mines are running on minimum staff levels to prevent the spread of the coronavirus among its workforce, as its licence to operate comes under extreme pressure from Brazilian
Iron ore prices for June 1, 2020: Spot somehow fell despite runaway futures which then reversed overnight. The surge is driven by a combination of recovering Chinese demand as empty apartments blossom with infrastructure: The steel PMI launched back into the positive at 50.9 with new orders surging to 52.6: Leaving China short of the
Iron ore prices for May 29, 2020: Everything to the moon. The China PMI has construction registering above 60 again, boom-time levels. This is despite what remains a weak Chinese recovery: But, as usual, what growth in activity there is is focussed on, you guessed it, empty apartments and roads to nowhere. So all good
Iron ore prices for May 28, 2020: Brazil looks bad again: It could be bad enough to disrupt seasonal weakness.
Apologies for lateness today. Been wrestling with a Telstra bot all morning. Iron ore prices for May 27, 2020: Not much in news. Here’s the latest steel inventory chart: Looks impressive but it isn’t. Seasonally-adjusted the stock is just as high as it was at its peak. The reasons why is that demand remains relatively
Iron ore prices for May 26, 2020: Not pretty on a day of tearaway broader fakeflation. Here’s why: China’s steel association and major steelmakers have called for an increase in domestic iron ore production as well as greater investment in exploration overseas to ensure supplies. He Wenbo, chairman of the China Iron & Steel Industry
Iron ore prices for May 22, 2020: Spot down on Hong Kong tensions. Paper and steel too. CISA major mill output for early May was the highest ever. My guess is that’s because a lot of EAF production remains offline. The reality is, end-user demand is still weak, via Capital Economics: And there wasn’t of
Iron ore prices for May 21, 2020: Everything flew late as this: After Brazilian iron ore miner Vale SA cut its 2020 production outlook to 310 million-330 million tonnes, from 340 million-355 million tonnes previously, “more downgrades may be on the way as COVID-19 infections accelerate in Brazil’s key mining provinces”, said Morgans Financial Ltd
Via the AFR comes a huge laugh out loud: China has changed its inspection procedures for iron imports under new rules that analysts say could be used to block Australia’s most important export, as trade tensions between the two countries escalate. China’s Customs authorities said in a notice the new supervising rules, which take effect
Iron ore prices for May 20, 2020: The latest high-frequency data from Capital Economics is not very good: If it were not for Brazilian risks these numbers would suggest that iron ore should be falling. Though there this: Local government debt issuance is mad as the infrastructure pipeline refills. Still, the recovery remains fitful and
Iron ore prices for May 19, 2020: These price moves are all about a Brazil supply panic. Which does not mean it’s not rational. The virus is going nuts: That said, this: A total of 88 vessels carrying 13.51 million mt of iron ore arrived at major Chinese ports during May 10-16, SMM estimates. This
Iron ore prices for May 18, 2020: Whoho! And we’re off. Spot to the moon. Paper…moon. I would like to see rebar break its downtrend too but the huge inventory overhang explains that. Port inventories are cratering. Add Brazil sinking into virus disaster and China reverting to form with building stimulus – which will get stronger
Via the excellent Damien Boey at Credit Suisse: “Hard” indicators in China improving. Official headline data for China were mixed in April. Industrial production surprised to the upside, while retail sales and fixed asset investment surprised to the downside. But there was general improvement in the “hard” indicators we track for the sake of the Australian commodities outlook. Year-ended growth in electricity
Iron ore prices for May 187, 2020: We’ve now got a pretty good restocking pulse going. Some of it is doubtless steel mills looking at Chinese stimulus but the recovery is still slow and halting: The more important driver remains the supply side, in particular Brazil, which is inking into virus hell. Only six weeks
Prices for May 15, 2020: Goldman has a wrap: Goldman Sachs says the iron ore price could retreat to $US70 a tonne as the market moves into surplus in late May-June before rebounding back to $US85 a tonne in the fourth quarter. The broker estimates the iron ore market was in a 20 million tonne
Iron ore prices for May 13, 2020: I see this latest strong price action as a combination of restocking, exaggerated by Brazil worries, and strong seasonality. The last will reverse into June but the former will last as long as the virus threatens supply. Capital Economics high-frequency indexes look better today too: The major pulse
Iron ore prices for May 12, 2020: Chinese credit gave us a bounce yesterday but I am much more concerned about Brazill, via Domain: Faced with overwhelmed hospitals and surging coronavirus deaths, Brazilian state and city governments are lurching forward with mandatory lockdowns against the will of President Jair Bolsonaro, who says job losses are
From Westpac’s excellent Justin Smirk: Coal prices tumbled in April, iron ore was more stable while base metals firmed a little Coal prices have been falling rapidly with the latest spot Qld met coal prices down –39% in the last three months and Newcastle thermal down –21%. As a result we have lowered our near,
Iron ore prices for May 11, 2020: Not much in news but check this out: Suddenly the empty apartments recovery looks to be in trouble. No wonder the PBOC is mulling flood stimulus. More on that later.
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Iron ore prices for May 10, 2020: Spot jumped, I suspect over two days. Steel output is now roughly tracking last year’s output despite the vast inventory overhang. The Brazil risk is rising: Concerns about Brazilian iron ore supply resurfaced among market participants this past week due to expectations that exports of the product would
