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 (drivel)

Iron ore prices for May 10, 2018: Tianjin benchmark rose 25 cents to $66.50. Steel firmed. Paper too. No change to the outlook. In news, BI reports on a bullish ANZ: “Steel prices recovered strongly in April. Part of this has been a fall in inventories,” the pair wrote in a note today. “Strong domestic


Daily iron ore price update (imports peak)

Iron ore prices for May 8, 2018: Tianjin benchmark lifted 30 cents to $67.35. Paper fell overnight. Steel rolled yesterday. Coking coal too. Rebar inventories are drawing very normally. Mill output is ripping, hitting 1.91mt per day, an all-time CISA record. Yesterday’s trade data offered some insights. Iron ore imports were 83mt in April and


Daily iron ore price update (stable)

Iron ore prices for May 4, 2018: Tianjin benchmark fell 70 cents to $66.10. Paper was stable overnight. Coking coal strong. Steel stalled. No change to outlook. In news, the AFR some a little material on Roy Hill: In the March quarter Roy Hill appears to have shipped less than 11.7 million tonnes. That would


Goldman makes a terrible commodities call

I often wonder at Goldman analysis. It is the most complex and arcane in the investment bank market, as if speaking Zwahili is more important to the bank than substance. No better example comes today from its late cycle bullish call on commodities: Robust late-cycle growth is depleting global supply chains, creating increasing positive carry.


Stupid Atlas shareholders want more

Via The West: MinRes announced a $280 million, all-scrip bid for Atlas on Monday, which would give its shareholders one new MinRes share for every 571 Atlas shares they hold. The offer values Atlas about 3¢-a-share, representing a 59 per cent premium to its last traded price of 1.9¢ before the offer was announced.  Atlas’


Daily iron ore price update (China slows)

Iron ore prices for April 11, 2018: Tianjin benchmark was down $1.65 to $64.20. Paper held on overnight. Coking coal futures are breaking. Steel is soft. China is slowing. It always begins in the PPI. Some more on that from Vertical Group: FIRST… THE “HARD DATA”. Last night, China released factory inflation numbers (i.e., PPI), which slowed for