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 price charts for August 29, 2017: Tianjin benchmark was down 40 cents to $76.10. Paper burned overnight, especially for coking coal. Steel has not updated. Paper is clearly falling faster than physical so the latter obviously has ongoing tightness. That said, if coking coal capitulates as its supply disruptions pass then the iron
Break! XJO has just seen its symmetrical triangle break down the wrong way. It’s taken out the 200DMA to boot: This clearly opens the way for lower. Thanks DPRK! This should still lead absolutely nowhere in terms of North Asian conflict. Japan and US have requested a UN Security Council meeting. But we’ve yet to
Iron ore price charts for August 28, 2017: Tianjin benchmark fell only 20 cents to $76.30 after futures dropped much further. Paper firmed overnight. Steel is stalled. We definitely appear to be getting bogged down at these levels across the complex. Iron ore has recently reacted to the weak USD but not now. CISA output
Jonathon Tepper has a new name for the CBA: And investors are voting with their wallets, hitting new lows: The chart still suggests no support right down to $70 and with the politics getting worse who knows? The under-performance is worsening but the whole sector appears increasingly tarnished: Meanwhile today, Dalian has managed to ease
Tianjin benchmark was unchanged at $76.50. It feels toppy given paper has rallied more. The latter was slain Friday night. I couldn’t find any trigger so perhaps it’s just profit taking. The two coals are still very high. Chinese steel mill profitability is still insane despite the bulk rally. Port stocks fell another 1.75mt to
Via Macquarie: Non-major iron ore slips on Indian summer: Iron ore numbers reveal a marked slump in nonmajor, seaborne supply as India remains largely out of the seaborne market. Despite a sharp uptick in prices during July, Chinese imports from non-major supply, a very price elastic segment of the market, fell to 10.3 Mt,
Dalian is warming up again today: XJO is up too as its symmetrical triangle narrows: With Big Iron powering, it would seem that the odds favour an upside break from that pattern: Big Gas also appears constructive as it ravages east coast pensioners: And Big Gold looks positive too as it climbs: But holding it
Via Credit Suisse: Iron ore supply deficit to China continues – steel demand accelerated. It is probably fair to say that almost every commodity analyst looking at the seaborne iron ore market over the last few years has calculated that the iron ore market is in over-supply and getting worse. But we have all been
Iron ore price charts for August 23, 2017: Tianjin benchmark fell $1.40 to $77.40. Paper firmed overnight. Steel fell sharply. From Reuters: Steel and iron ore futures in China fell about 4 percent on Wednesday as a selloff in steel dragged down prices of the steelmaking raw material, cutting short a rally that lifted iron
First, the “buy” from Deutsche: New strategy and targets should result in significant re-rate BHP has reported a strong FY17 result with close to record FCF of US$12.6b driving net debt down to US$16.3b. Earnings were below our estimate on higher net interest. A revamped strategy with measurable targets was outlined which we applaud. BHP
Macquarie’s excellent monthly steel mill sentiment survey leaves no room for doubt. Chinese steel is in a full blown boom: Sentiment among players in the steel and iron ore industries remains very bullish this month, particularly on the steel side. The market is holding a positive outlook on steel prices based on the expectation
Iron ore price charts for August 22, 2017: Tianjin benchmark rose 70 cents to $78.80. Coking coal futures are falling as the seaborne price is now more expensive than Chinese sourced. Futures were pounded overnight. Steel is near its highs. There’s a good chance we’re done here. Coking coal is unlikely to go higher and
Dalian is up again today but looking a little tired as parcel limits kick in: Big Iron ore still roaring: Big Gas is outdoing oil: Big Gold looks strong: Terror Bank continues to under-perform: And Big Liar to ignore reality, though MEA has faded (or that might be an uber-bullish “cup and handle” formation: Finally,
The RBA famously described the China mining boom as a three phase event: The mining boom can be viewed as a confluence of events that have boosted mineral commodity prices, mining investment and resources production. This combination of shocks has boosted the purchasing power and volume of Australian output. It has also led to large
Via Bell: Outstanding earnings growth FMG has reported an earnings result for FY17 that has come in below market consensus and our estimates, despite profit growth of 112% yoy to US$2.1 billion (US67cps or A85cps for current P/E ratio of 6.5x). The exception was the declaration of a A$0.25/sh final dividend, for a total FY17
Iron ore price charts for August 21, 2017: Tianjin benchmark poured it on, up $3 to $78.10. Paper lifted overnight. Coking coal is having more trouble post-futures limits. Reuters has more: The Dalian Commodities Exchange on Friday said it will limit the daily purchases and sales of contracts for delivery in January and February to
Via Macquarie: Spot HCC prices have increased by a further ~$19/t to $195/t since our last update on July 27, as Chinese mills restocked coking coal tapping into a tight seaborne market. Seaborne prices have spiked, but with the physical arb between domestic and seaborne prices now largely closed and steel prices topping out,
The remarkable turnaround is now complete: That’s a huge payout ratio, turning the stock into a cash pump if the iron ore price holds up. Of course it won’t, but with gearing so thoroughly reduced it can ride out the volatility by borrowing at the troughs to support the dividend. It should make the stock
Iron ore price charts for August 18, 2017: Tianjin benchmark fell 60 cents to $75.10. Paper soared. Coking coal was stable. Thermal is in heaven. Chinese iron ore port stocks fell 1.8mt to 135.2mt. Do we have another bulk commodity shortage? Chinese steel mill stocks have been rising as port stocks fall so this
Via Macquarie: China’s latest macro-release this week gave an ambiguous picture on the health of the economy. Conflicting signals from June and July numbers, between macro and micro data, and with respect to liquidity vs money supply are just some of the issues. We see the property market slowing in 2H but FAI picking
Back in saddle after this morning’s dummy spit, Credit Suisse has some of the finer detail driving the coking coal rebound: China struggling to meet demand China demand is stronger than anticipated due to solid steel production, which is probably enhanced by the closure of induction furnaces and their replacement with blast furnace steel. Against