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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The ferrous complex was soft on November 15, 2021 as spot eased, paper firmed overnight and steel has not updated: The market continues to smoke crack. Chinese steel is an outright disaster: The pipeline ahead is even worse: And there is only one thing standing between iron ore and catastrophe. That is the thermal coal
The ferrous complex was hammered November 12, 2021 as spot and steel tumbled and paper held on overnight: Port inventories were up another 3mt plus last week to 150mt: Output adjusted, inventories are at a record high already. Steel is still at the brink and, most importantly, Chinese average daily coal production hit 12.05mt in
The ferrous complex popped on November 11, 2021 with spot and steel but paper flamed out overnight: The market is trying to get excited by yesterday’s wave of policy rumours. But, the truth is, they are policy calibration not a swing to broad stimulus so the downside case for Chinese construction is intact if marginally
The ferrous complex was pretty wild on November 10, 2021 as spot tumbled but steel surged and paper gained overnight: Here it is in black and white from Wall Street’s Goldman Sachs: 2021 has been a year of change in China, with policymakers continuing normalizing macro policies and introducing regulatory measures in numerous sectors. While
The ferrous complex hung on for grim death on November 8, 2021 as spot firmed, paper was hit overnight and steel fell: CISA released its late October output numbers for major steel mills and it was, again, unbelievably bad, down nearly 8%: The year-on-year collapse is roughly 160mt per annum. From the peak it is
The ferrous complex was weak on November 4, 2021 as paper fell more overnight and steel is in meltdown. Benchmark spot didn’t trade owing to a Singapore holiday: Steel is in meltdown: I see nothing to stop this. Chinese demand is falling faster than mills can cut output. There’s 120mt of EAF yet to return.
The ABS has just released trade data for September, which posted a $2.5 billion decline in Australia’s trade surplus on falling iron ore prices: Goods and services credits (exports) fell $3,081 million (6%) to $44,969 million: Whereas goods and services debits (imports) fell $586 million (2%) to $32,725 million driven by continued global supply chain
The ferrous complex was all over the place on November 3, 2021 as spot firmed, paper was whacked overnight and steel fell: Thermal coal futures took off in a dead cat bounce yesterday that lifted the ferrous complex. Even so, Shanghai rebar is still falling: And seaborne coking coal is still running its own race
The ferrous complex was flushed away on November 3, 2021 as spot, paper and steel all crashed. There was a little repair for futures overnight: The trigger was Chinese port stocks which piled on another 4mt to 146.5mt last week: The port inventories to steel output ratio is back at record highs: Rising inventories means
The ferrous complex was very weak on November 1, 2021 as spot tumbled, paper fell more overnight and steel crashed: It’s being led by the evisceration of thermal coal which will in due course promote the resumption of 120mt of suspended EAF production in China and foist that adjustment onto BOF instead: This will mean
The China steel PMI is now in rare territory: The full script is below: Judging from the steel industry PMI surveyed and released by the China IOT Iron and Steel Logistics Professional Committee, it was 38.3% in October, a decrease of 6.7 percentage points from the previous month. The steel industry is operating tightly. The sub-indices
The ferrous complex was mixed on October 29, 2021 as spot was hammered, paper stabilised overnight and steel lifted: Steel (rebar) is clinging to technical support: There are rumours of even more steel shutdowns but the more important factor on that front is the imminent reopening of 120mt of shuttered EAF steel output. The reopening
Iron ore and coking coal were trying to rally this morning before a stern word from the NDRC declared that prices have further to fall and remain far above production costs. Ain’t that the truth: Indeed they are. FAR below. Dalian coking coal: And iron ore: RIO is in free fall. For some unknown reason,
The ferrous complex was pretty wild on October 28, 2022 as spot tumbled, paper fell more and steel crashed before finally catching a bid: Coking coal was eviscerated again but, finally, put a bid in overnight: We may (or may not, these markets are crazy) be through the worst of the crash for now. But,
The coal bubble is bursting like a fat, overcooked sausage. China triggered a rout yesterday with the news that the hoarders are to be beheaded: China’s thermal coal futures slumped to their lowest in more than a month on Wednesday, marking a sixth consecutive day of declines, after the country’s state planner said it would
The ferrous complex was crushed on October 28, 2021 as spot fell, paper fell more and steel is a plunging anvil: The entire ferrous complex is now in an outright crash. Steel has fallen literally off the cliff and blasted through critical price support like it was not there: In my view, steel prices are
The Chinese property developer crisis still shows no signs of easing despite incremental efforts to fix it. Policymakers are applying the CCP jawbone: Chinese authorities told billionaire Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s deepening debt crisis, according to people familiar with the matter. Beijing’s directive to the Evergrande
The ferrous complex was strong on October 26, 2021 as spot lifted, paper firmed overnight and steel bounced: We appear to be range trading for now though steel not falling helped. But how long can that last as coking is eviscerated, limit down to all new lows overnight: Another interesting coking coal distortion has emerged:
The ferrous complex was weak on October 25, 2021 as spot firmed, but paper fell overnight and steel looks to be breaking down: The key chart now is this: China’s immense steel output cuts have protected steel prices so far this year. But underlying demand is so bad that inventories have been stable anyway. Most
UBS says don’t go to RIO: RIO’s new mgmt team set out its strategy to focus on operational performance, ESG credentials & growth, while rebuilding trust after Juukan Gorge. It aims to cut its Scope 1&2 emissions faster (-50% by 2030) at a cost of ~$7.5b. RIO pivots the business more towards growth in energy
The ferrous complex was a bit of a mess on October 20, 2021 as spot firmed, paper jumped but steel was hit: The newsflow this week has been dominated by the iron ore cartel downgrading its output projections. This is poor mining and even poorer economics but, these days, it’s all about control fraud as
It’s farewell to Chinese new home price gains with the seventy city index yesterday pulling a donut in September (-0.08) but still up 3.8% over the year: The breadth of losses is expanding sharply as the freeze spreads. Only 14 of 70 cities recorded price gains: Prices are slowing everywhere: Existing property is falling faster
The ferrous complex was roughly stable on October 20, 2021 as spot eased and paper firmed overnight. Steel was strong yesterday: Chinese port stocks of iron ore are rising fast, just shy of 140mt last week: With steel output cratered, the “days of use” port inventory ratio will already be near records. Just another very