Iron ore prices for May 16, 2018: Tianjin benchmark rose 25 cents to $67.65. We’re running on the spot here. Next big move remains down into EOFY.
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Daily iron ore price update (running on spot)
Primary Section
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 (look out below)
Iron ore price charts for May 15, 2018: Tianjin benchmark fell 85 cents to $67.40. Paper fell last night. Steel eased yesterday. Rebar stocks are stilling drawing at a good pace but remain abundant. We’re headed lower from here is my guess. Output is stunning. The macro is slowing. Inventories are bloated. Summer is cyclically
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Daily iron ore price update (astonishing output)
Iron ore price charts for May 14, 2018: Tianjin benchmark rose 45 cents to $68.25. Paper was up again overnight. Coking coal is afire. Steel faded. Port stocks fell a decent slab last week to 158.9mt. CISA steel output in late April was an astonishing 1.91mt per day. We’re enjoying a post-shutdown Spring in Chinese demand.
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Daily iron ore price update (scraptastrophe)
Iron ore prices for May 1, 2018: Tianjin benchmark rose $1.30 to $67.80. Paper was strong. Steel too. Mooted coking coal plant closures in Jiangsu were the trigger. No change to outlook. Platts has a nice post on the medium and long term: China’s new era of environmental regulation could see its annual crude steel
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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
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Daily iron ore price update (waiting to fall)
Iron ore prices for May 4, 2018: Tianjin benchmark fell $1 to $66.25. Paper held on. Steel folded yesterday. We’re really just waiting to fall into EOFY here. I’m looking for low $50s within seven weeks.
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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
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Daily iron ore price update (coking coal contracts)
Iron ore prices for May 7, 2018: Tianjin benchmark lifted 85 cents to $66.95. Paper firmed overnight. Coking coal is off the leash again. Steel is firm. Iron ore port inventories are back over 160mt. It is quite clear that iron ore prices can’t go higher unless hoarding grows even further. The market is obviously
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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
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Daily iron ore price update (flame out)
Iron ore prices for May 3, 2018: Tianjin benchmark was unchanged at $66.80. Paper fell overnight. Steel was firm. No change. Going lower soon.
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Daily iron ore price update (much ado about nothing)
Iron ore prices for May 3, 2018: Tianjin benchmark was up $1.45 to $66.80. Paper went higher overnight. Steel went nuts yesterday. Rebar inventories fell to 7.13mt last week and the steel PMI lifted modestly to 51.7. All pretty normal seasonal stuff. Despite the excitement in the steel price, inventories remain high for May so
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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.
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Daily iron ore price update (same, same)
Iron ore prices for April 26, 2018: Tianjin benchmark rose 65 cents to $66.90. Paper was firm overnight. Steel is enjoying a seasonal rally. There’s no change here. April is always a good month as steel inventories draw leading to weak May and June as mills destock into the end of financial year. Then it’ll
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Daily iron ore price update (seasonality)
Iron ore prices for April 25, 2018: Tianjin benchmark is at $65.25. Paper was down more. Steel prices up as rebar inventories draw in China, down to 7.69mt last week. CISA early April output launched 5% to record levels. As expected, markets are rallying on the seasonal draw down in Chinese steel stocks. Nothing unusual
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Fortescue shocker: Costs up, prices down
The dream is over for FMG: That assumed oil price is far out of the money and the risk is clearly for a miss on costs. The price realistion is in-line with recent guidance but it is still below it in this QTR and the risk remains that it, too, will miss. And all of
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Daily iron ore price update (excitement)
Iron ore prices for April 23, 2018: Tianjin benchmark rose 70 cents to $67.55. It is under-performing paper, a sure sign of bear market rally. Port iron ore stocks fell a bit but remain crazy. Steel jumped yesterday as rebar stocks drew down to 8.25mt. All perfectly normal and not supportive of the price action.
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Daily iron ore price update (flame out)
Iron ore prices for April 20, 2017: Tianjin benchmark fell -$1.45 to $66.85. Paper added a little overnight. Steel was weak. Whether our little bear market rally is over already is neither here nor there. Beyond your nose nothing has changed. H2 remains the iron ore witching hour as China slows.
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Daily iron ore price update (bear market rally)
Iron ore prices for April 19, 2018: Tianjin benchmark lifted $1.85 to $68.30. Paper was limit up at the close yesterday but came off overnight. Steel rose. Citi captures the best way to think about the Chinese easing: Back in November the PBoC introduced what some have termed ‘Yield Curve Control With Chinese Characteristics’ when
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Daily iron ore price update (stimulus already?)
Iron ore prices for April 18, 2018: Tianjin benchmark added $2 to $66.45. Paper jumped overnight. Steel yesterday. Here’s the driver of the pop: China slashed the RRR for banks. This will free up a bit of lending. However, the PBOC has also been tightening money market rates. That said, bond yields have broken down
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RIO iron ore volumes on track
From RIO: Rio will have a accelerate modestly from there to meet the annual volume goal which is pretty normal.
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Daily iron ore price update (no growth)
Iron ore prices for April 17, 2018: Tianjin benchmark lifted 40 cents to $64.45. Paper was up overnight on a PBOC RRR cut. Coking coal too. Steel is range trading still. CISA late March output for major mills barely shifted and as you can see and has closed to zero growth year on year. Yesterday’s
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Daily iron ore price update (on like Donkey Kong)
Tianjin benchmark fell $1.20 to $64.05. Steel is range trading. Coking coal is weak. Iron ore port stocks eased last week ad did rebar inventories. No change. We’re going lower. One reason why is that Vale has some serious catching up to do on volumes: The world’s top iron ore producer said that heavy rains
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The future of coking coal
A nice primer here from BofAML: Met coal prices more than doubled from ~$90/t to ~$200/t in six weeks in AugustSeptember 2016 due to China’s production curb on local met coal, where government restricted the number of working days from 330 days/year to 276 days/year. This turned out to be a game changer for the
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Dalian invites foreign iron ore speculators
Via Xinua: China will introduce foreign investors to trade in domestic iron ore futures from May 4, according to the country’s securities regulator. The iron ore futures are traded on the Dalian Commodity Exchange, which rolled out rules in late March to guide foreign investors to participate in the market and took a market test
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Daily iron ore price update (topping volumes)
Iron ore prices for April 13, 2018: Tianjin benchmark rose 50 cents to $65.25. Paper fell back overnight. Coking coal continues to fall. Friday’s China trade numbers had a little rebound in steel exports to 5.65mt: We can expect that to continue as the Chinese steel price falls, though yesteryear’s boom will not return. We
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Mt Gibson: Iron ore grade discounts structural
Via The West: Mt Gibson Iron boss Jim Beyer says the wide price spread across ore with varying iron ore grades is here to stay. Speaking after the miner released its March quarter report, Mr Beyer said while there would be “pinching and swelling” based on seasonal demand and short-term, city-specific policy changes in China,
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Daily iron ore price update (weak demand)
Iron ore prices for April 12, 2018: Tianjin benchmark rose 0.55 to $64.75. Steel is marking time. My view remains the next big move is down. Coking coal is breaking. Reuters has texture: Coking coal futures in China fell almost 4 percent on Thursday and iron ore also slipped, pressured by worries that demand for
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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’
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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
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Daily iron ore price update ( short squeeze)
Iron ore prices for April 10, 2017: Tianjin benchmark up $1.80 to $65.85. Paper up more overnight. Steel too yesterday. Rebar inventories are running down now which is perfectly normal. CISA steel mill output rose 3% mid-March to 1.78mt per day. It should converge with last year’s output numbers over the next few months