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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6

Big Sleazy breaks to new lows

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2

Daily iron ore price update (stall)

Iron ore price charts for September 5, 2017: Tianjin benchmark rose 30 cents to $77.50. Paper fell sharply overnight. Rebar is at new highs. Retuers has texture: China’s iron ore futures dropped on Tuesday for the first time in four sessions after a fire at a government-owned steel mill raised concerns that planned safety inspections may

5

Chinese steel mill reform drawing to a close

At last some clarity on the Chinese steel sector reform that has so disrupted the market his year. Via Macquarie: China commodities trip: Update on government policy and steel  At the start of this year, we highlighted that Chinese commodity demand would be intertwined with government policy in 2017. Government intervention has stepped up

3

Daily iron ore price update (full blown boom)

Iron ore price charts for September 1, 2017: Tianjin benchmark was unchanged at $75.80. Paper ripped overnight. Steel is hovering at the highs. Port stocks were basically stable. The thermal coal restock appears to be easing. CISA mid-August output at major steel mills was insane as induction mill closures swing some 40-50mt of production into

0

China steel PMI melts up

The China steel PMI is notoriously volatile. It is perhaps therefore a better directional indicator than it is an absolute reading on conditions. Nonetheless, today’s version is off its face at 57.2 with new orders rocketing to 66.6: Stock inventories are still drawing as well though raw materials are rising. The non-manufacturing PMI suggested a

1

Daily iron ore price update (paper burn)

Iron ore price charts for August 29, 2017: Tianjin benchmark was down 40 cents to $76.10. Paper burned overnight, especially for coking coal. Steel has not updated. Paper is clearly falling faster than physical so the latter obviously has ongoing tightness. That said, if coking coal capitulates as its supply disruptions pass then the iron

19

North Korea shoots down ASX

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6

“Sleaze” Bank stock sinks with its reputation

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1

Daily iron ore price update (bullish ports)

Tianjin benchmark was unchanged at $76.50. It feels toppy given paper has rallied more. The latter was slain Friday night. I couldn’t find any trigger so perhaps it’s just profit taking. The two coals are still very high. Chinese steel mill profitability is still insane despite the bulk rally. Port stocks fell another 1.75mt to

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More on iron ore supply cuts

Via Macquarie:  Non-major iron ore slips on Indian summer: Iron ore numbers reveal a marked slump in nonmajor, seaborne supply as India remains largely out of the seaborne market. Despite a sharp uptick in prices during July, Chinese imports from non-major supply, a very price elastic segment of the market, fell to 10.3 Mt,

7

More on the sudden iron ore shortage

Via Credit Suisse: Iron ore supply deficit to China continues – steel demand accelerated. It is probably fair to say that almost every commodity analyst looking at the seaborne iron ore market over the last few years has calculated that the iron ore market is in over-supply and getting worse. But we have all been

1

Daily iron ore price update (still hot)

Iron ore price charts for August 23, 2017: Tianjin benchmark fell $1.40 to $77.40. Paper firmed overnight. Steel fell sharply. From Reuters: Steel and iron ore futures in China fell about 4 percent on Wednesday as a selloff in steel dragged down prices of the steelmaking raw material, cutting short a rally that lifted iron