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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Iron ore prices for September 12, 2018: Spot down. Paper was smashed yesterday but flew overnight on the trade news. Steel will likely recover today. Chinese credit showed a flicker of life in August but not enough to change things: No change. Down into Q4.
Via Reuters: Prices of steel and its raw materials fell sharply in China for a second session on Wednesday, hitting multi-week lows, as more investors liquidated positions with oversupply risks rising as Beijing mulls a flexible implementation of its output curbs. China is considering allowing its northern provinces to decide individual output cuts by heavy
Via S&P: Our price assumptions for iron ore are unchanged. In our view, favorable steel producer margins and supply side reform in China should underpin steady demand for iron ore this year. This demand, together with disciplined new iron ore supply from major players, should support a relatively stable iron ore price for the rest
Iron ore price charts for September 11, 2018: Spot eased. Paper down overnight. Steel futures got mashed as authorities mull different supply curtailments which are largely irrelevant anyway. Down into Q4.
Iron ore prices for September 10, 2018: Spot down. Paper down. Steel up. CISA production lifted a little in late August but remains in a down trend. Prices to weaken into Q4.
Iron ore price for September 7, 2019: Spot unchanged. Paper firm. Steel firm. Rebar inventories fell a little last week but remain fine. It’s clear that markets are hanging desperately to the notion of Chinese stimulus. Forgotten is that demand must slow first. Down into Q4.
Iron ore prices for September 6, 2018: Spot jumped. Paper more. Steel too. Port inventories are falling at a good clip down to 149.2mt. The iron ore market used to so pure. Today it is all noise and no signal. It’s obvious that steel demand is falling away, that there’s plenty of inventory, that mills
Iron ore prices for September 5, 2018: Spot up. Paper up more. Steel easing. Pulling a Costanza again. The worse the emerging markets and commodities bust gets the more the iron ore market expects Chinese stimulus. Falls still ahead.
Iron ore price for September 4, 2018: Spot up. Paper up. Coking coal up. Steel up. CISA output for mid-August fell away to hit exactly the same level as last year. There is plenty of steel. Demand is clearly weakening. Dead cat bounce.
Iron ore prices for September 3, 2018: Spot was flat. Paper too. Coking coal futures are deflating. Steel is way too high given inventories are 1mt above last year and absolutely fine. The China steel PMI is still solid at 53.4 but fading. Prices are going to fall. The market is onto it with FMG
Iron ore price charts for August 31, 2018: Spot firmed. Paper fell. Steel is retracing. We’re into September and that is not good for iron ore: We may see the cycle distended a little by preparations for Winter shutdowns but I still think it will hold sway. Time to duck.
Iron ore prices for August 30, 2018: Spot flat. Paper jumped overnight but before Trump’s big bash. Steel has flamed out. The truth is out at Macquarie: The bank tracks Chinese imports via customs data and shipping information from exporters, and so far in 2018, iron ore imports appear to be flat year-on-year. That’s despite
Iron ore prices for August 29, 2018: Spot down. Paper down more overnight. Steel did OK yesterday. I still think the top is in here for the remainder of the year.
Via Platts: Open interest in iron ore futures traded on China’s Dalian Commodity Exchange has fallen below 1 million lots in August, after peaking in April above 2.6 million lots. Iron ore open interest stood at 975,722 lots last Thursday, a year-to-date low, and at 981,858 lots on Monday. One lot is 100 mt. The
Iron ore price for August 28, 2018: Spot flat. Paper too. Steel fading still. No change in outlook, down into Q4.
Interesting to note that the Fortescue share price is again in free fall: It’s not a very pretty chart with support around $3 and that’s about it. The culprit is discounts that just won’t narrow, via Platts: Australian miner Fortescue Metals Group has maintained the discount for term contracts for 58.3%-Fe Fortescue Blend fines and
Iron ore prices for August 27, 2018: Spot down. Paper down. Steel down. I think the top is in here. The price signal from steel does not need to be this high and we’re entering the seasonally weak period plus Chinese Winter shutdowns. World Steel is still booming though: World crude steel production for the
Terrific stuff here from Westpac’s Justin Smirk: •Demand for iron ore has been very robust this year but more importantly there has been the collapse in Chinese ore production in response to industry reforms as well as a soft patch in imports. The more rigorous implementation of environmental policies has hit iron ore miners hard.
Iron ore prices for August 24, 2018: Spot firmed. Paper was flat. Steel fell. Rebar inventories are still one million tonnes higher than last year yet steel prices are 30% higher. Doesn’t make sense to me given even if Winter shutdowns are a little longer they we already know that idle capacity can cope. I
Iron ore prices for August 24, 2018: Spot down. Paper too. Steel faded. Hard to know if the rally is cooked. September is very weak seasonally but Winter shutdowns have distorted even that. My guess is the top is in and the slide into Q4 has begun.
Iron ore prices for August 22, 2018: Spot did not trade. Paper fell. Steel rose to new highs. Nothing changed. Strong into Q4 correction.
Iron ore prices for August 21, 2018: Spot down. Paper down further. Steel and coking are crazy. CISA major steel mill output for early August rose 1.6% to 1.94mt per year. As you can see, steel output is falling away at a pretty good clip versus last year. Despite this, steel inventories are only falling very
Iron ore price update for August 20, 2018: Spot firming still. Paper was down overnight. Steel was crazy though inventories are still stable. Texture from Reuters: Prices in China for rebar construction steel on Monday hit their highest in nearly seven years, boosted by concerns over tight supply. Prices were buoyed by market chatter on
Iron ore prices for August 17, 2018: Tianjin spot still firming. Paper up overnight. Steel still strong. Port stocks are climbing again as stimulus hopes hold sway. No change to outlook. Firm until the Q4 correction.
Got some chart troubles today so here are the numbers: Tianjin benchmark spot: $66.90 (-15 cents) Dalian 6 month future: 494 Dalian 6 month coking coal 1266 Shanghai rebar futures 4122 No change to outlook. Firm headed into Q4 weakness.
Iron ore prices for August 15, 2018: Spot down. Paper caught contagion overnight. Steel is fine. At some stage in the next three months we’re going to see a goodly selloff. The question now is will that be a buying opportunity for 2019 as Chinese stimulus pours in or the beginning of the end for
Spot down. Paper down. Steel up. The last time steel was at these prices iron ore was trading at $180. Output is astonishing: Texture from Reuters: Mills in the world’s top steel producer churned out 81.24 million tonnes of crude steel last month, up 1.3 percent from June and 7.2 percent from the same month
Iron ore prices for August 13, 2018: The stimulus party rolls on, largely confined to futures markets. This is still not inconsistent with seasonal patterns, especially so since the Winter shutdowns bring forward demand. Rebar inventories are still falling at a decent clip even if well above last year. My outlook remains unchanged. Overnight Chinese
We all know how it ends. Eventually China is overwhelmed by its own bad debt. The dreams of empire crumble to empty vestiges, wealth greys with demographics, dynamism sinks into the rentier bog and endless growth into secular stagnation. This is China’s destiny and Australia will suffer for it. But in the meantime we are
Tianjin benchmark lifted 65 cents to $68.75. Paper fell overnight. Rebar inventories fell again last week but remains well above the lows of last year. CISA daily steel output is trending down solidly. Steel prices have clearly responded to easing Chinese monetary policy. But there is nothing here out of the ordinary yet in terms
