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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4

Stupid Atlas shareholders want more

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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

1

A postcard from China’s steel sector

Via UBS: Is demand OK given some weaker signals in 1Q18?  A key question was the strength of demand given weak PMIs in Feb-18 and large inventory builds through Feb+Mar-18.  We learned that demand had been held back through these months, reflecting:  A later spring festival than usual, where many firms and

14

Fortescue breaks support

Here’s the chart: I don’t think I have ever seen a more perfect bearish descending triangle pattern. It’ll need to close here or lower to confirm the break. The target price is anybody’s guess but new lows are quite possible. Weighing today is the 58% iron ore is at $37.44. I reckon it’s headed deep

25

When Andrew met Pauline

Via the SMH: Andrew “Twiggy” Forrest has pledged to reinvest every dollar saved from the Turnbull government’s full company tax cuts back into job creation and expanding his operations, in a last-ditch effort to convince the Senate crossbench to pass the $65 billion measure. His company, Fortescue, paid $2 billion in tax last year and

4

Iron ore discounts to disappear as it crashes?

So says Liberum: The proposition that there’s a structural shift underway in the iron ore tastes of Chinese steel mills toward the less-polluting varieties is just a myth, according to Liberum Capital Ltd. “As margins fall, lower-grade material becomes more economic and the discount shrinks,” analysts Richard Knights and Ben Davis said in a note. “We

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Daily iron ore price update (new lows)

Iron ore price for March 20, 2018: Tianjin benchmark fell 55 cents to $66.80. Paper rebounded overnight. Steel bottomed. Coking coal is doing better. There really is no way to go but down for steel and iron ore given inventories and weakening demand growth. Coking coal is the one last hope for the ferrous complex.

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Cliffs shuts WA iron ore mine

Had to come: Cleveland-Cliffs will make the last shipment of iron ore from its Koolyanobbing operations near Southern Cross by the end of June with the potential loss of hundreds of jobs. Cliffs formally notified contractors yesterday that it would wind down the 11 million tonne-a-year iron ore business by June 30, which provides work

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Daily iron ore price update (goodbye)

Iron ore price update for March 19, 2018: Tianjin benchmark was clubbed $2.25 to $67.35. Inconveniently, port stocks rose 600kt last week to hit a new all time high of 159.18mt. Steel has ruptured its steeper uptrend line. Coking coal is doing better. When one considers that grade discounts ($4) and higher shipping costs ($6-8)

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Daily iron ore price update (dead cat)

Iron ore prices for March 14, 2018: Tianjin benchmark jumped $1.80 to $71.75. Paper eased off overnight. Coking coal the same. Steel was much less excited. Port inventories fell 500kt to 158.6mt last week. Chinese data was good so we got the bounce. It won’t last. Here’s a few charts from Capital Economics: Note the

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Daily iron ore price update (still weak)

Iron ore prices for March 13, 2018: Tianjin benchmark rebounded 95 cents to $79.95. Steel is still falling. Coking coal too. Pricing still look weak with more downside in the near and medium term. The Trump tariff stuff is accelerating.  Chinese demand appears soft and it’s possible that winter shutdowns actually brought forward demand. We’ll

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Daily iron ore price update (sell)

Iron ore prices for March 8, 2018:    Tianjin benchmark was splattered $3.20 to $72. Paper burned overnight. Coking coal too. Steel cracked yesterday. And why not? Inventories of everything are crazy. Supply is about to boom for steel. Steel exports are way down at 4.85mt in February, from yesterday: And will struggle to rebound

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Chinese smog improves…barely

Via UBS: China as a whole: Unhealthy Air Quality continues to the end of February In the last 2 weeks of Feb, data from UBS Evidence Lab shows >50% of provinces registered worse Air Quality Index (AQI) readings y/y even though the comparison should have benefited from less industrial activity with Chinese New Year being