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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9

China’s scraptastrophe builds

Bloomie has a little coverage the Chinese steel scraptastrophe today: With tighter emission limits, improved furnace technology and output curbs, mills are using more scrap than ever before, according to Goh Kian Guan, chief investment officer at recycler Chiho Environmental Group Ltd. If a steelmaker is causing too much pollution, “there’ll be a chance they

4

Daily iron ore price update (boomchakalaka)

Iron ore prices for October 26, 2018: Spot up. Paper up more. Steel up. There’s no downside here. Steel inventories are drawing despite massive output. Moderate stimulus is underway and it’s going to turn aggressive as tariffs weigh on industrial output. Xi Jinping has promised MOAR. Coking coal supply is squeezed. It’s boom chakalaka!

5

Daily iron ore price update (buy)

Iron ore prices for October 25, 2018: All prices were roughly stable except coking coal futures which are still pointing to heaven. CISA output for early October remains insane. The entire ferrous complex is oblivious to wider ructions as coking coal is squeezed and China pours in stimulus. We bought more major iron ore miners

3

Daily iron ore price update (whatever it takes)

Iron ore prices for October 22, 2018: Spot rocket. Steel rocket. And why not. Yesterday Xi Jinping issued his “whatever it takes” moment via Bloomie: President Xi Jinping vowed “unwavering” support for non-state firms over the weekend, the country’s stock exchanges committed to help manage share-pledge risks, and the government released a plan to cut personal

0

Daily iron ore price update (ease)

Iron ore price for October 19, 2018: Spot down. Paper up. Steel down. At this stage prices are so high that it’s difficult to see them going much higher. That said, I can’t get very bearish while coking coal supply is constrained despite demand that is going to weaken. Perhaps a trading range up here

0

Daily iron ore price update (all good)

Iron ore prices for October 12, 2018: Spot was up. Paper and steel firm. Rebar inventories are absolutely fine, still up one million tonnes on last year: As production remains mad, via CISA for late September output at 1.98mt: Friday’s trade data was also very much in control with steel exports leveling out around 6mt.

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Daily iron ore price update (Golden Week)

Iron ore prices for September 28, 2018: Markets are closed this week in China but steel is likely to see more pressure next week: China’s environment ministry issued a stern warning on Saturday to companies across heavy industry not to flout the nation’s tough emission rules — a move seen as quashing speculation that the

4

Daily iron ore price update (steely boom)

  Spot eased. Paper firmed overnight. Steel is soft but very expensive. CISA output rocketed in early September nearly 4%. It will be interesting to see inventories going forward. This could be demand brought forward for shutdowns. Steel growth worldwide is falling fast now: World crude steel production for the 64 countries reporting to the

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Daily iron ore price update (here it comes)

Iron ore prices for September 19, 2018: Spot down. Paper more. Steel up. Here it comes, via Reuters: The National Development and Reform Commission (NDRC), the top state planner in the country, said in a news briefing on Tuesday that China would ramp up investment in infrastructure, as well as in agriculture, poverty alleviation and

3

Daily iron ore price update (stimulus!)

Iron ore price charts for September 14, 2018: Spot firmed and paper added more. Steel was firm. Rebar inventories are fine at 4.33mt well above last year. The ferrous market is now pricing for the property boom that has been unleashed with more infrastructure to come. Given inventories of everything are already so high I