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 (boom times?)

The ferrous complex jumped again on May 23, 2022: Clyde Russell is excited: There are still concerns about iron ore shipments from Ukraine, which used to supply about 44 million tonnes a year to the seaborne market, mainly to European buyers. Ukraine was the fourth-largest iron ore exporter, but Kpler data shows shipments plunging to

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Daily iron ore price update (rates)

The ferrous complex was strong on May 20, 2022 thanks to the meaningless PBOC rate cut: MYsteel steel real-time indexes tell the tale: Production is down 8% from 2019, about 130mt of iron ore. 100mt of that is accounted for by steel recycling being offline. Global steel output is also down about 5% since then.

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Daily iron ore price update (at a loss)

The ferrous complex firm on May 16, 2022. Spot did not update: Yesterday’s China data has left me scratching my head. The numbers were disastrous across the board. With the exception of steel output which was only down 5%: Versus cement down 19%: I can only surmise that steel is stronger owing to accumulating inventories.

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Daily iron ore price update (splat)

The ferrous complex was belted on May 12, 2022: Not much new to report. But I note that Dalian coking coal is sliding as well, adding to the bearish sentiment: Oddly, this is now outpacing seaborne futures in Singapore which can’t last. There is nothing to suggest anything other than worsening demand in China for

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Daily iron ore price update (jawbone)

The ferrous complex was strong on May 11, 2022: The trigger was this: Chinese Premier Li Keqiang urged officials to use fiscal and monetary policies to stabilize employment and the economy as the country reels from Covid outbreaks and rising inflationary pressure. Yawn. Monetary and fiscal policy transmission is inhibited by property and OMICRON.  Westpac

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Wall-to-wall bearish iron ore data

The ferrous complex was mixed on Friday 30th of April, 2022: But the data remains terrible. Mysteel surveys show demand and output way down on last year: Production down 8% is the equivalent of 140mt less iron ore needed. The latest recycling shutdowns is roughly 40-50mt so there is an abundance of iron ore supply

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Fade the iron ore rally

The ferrous complex rallied on April 26, 2022: The CBA is making sense: Commonwealth Bank (CBA) director of mining and energy commodities research Vivek Dhar said the drop came as a result of COVID-19 lockdowns in China and what they could mean for demand of Australian ore. “Markets are worried that Beijing in particular maybe exposed to

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Daily iron ore price update (iron will)

The ferrous complex was soft on April 21, 2022: News is driven by the big three miners: BHP, the world’s largest listed miner, fell short of estimates for iron ore production for the March quarter, as a pandemic-related labour crunch weighed on its efforts to boost production in Australia’s Pilbara region. The miner also warned

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Daily iron ore price update (hoarding)

The ferrous complex was mostly weak on April 19, 2022: The newsflow was poor: The iron ore price fell on Tuesday after a spokesperson for China’s state planner said the country would keep reducing steel output this year. Adding to concerns over demand prospects for the key steelmaking raw material, China’s steel production hub Tangshan

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Daily iron ore price update (EAF returns)

The ferrous complex rallied modestly over Easter, 2022: Yesterday’s China data dump revealed a few things. First, steel production has leaped: Pig iron output is running at about 2018/19 levels, down roughly 9% YoY or 30mt of iron ore through Q1: The rebound has restarted recycling at scale but it isn’t showing any signs of