Iron ore prices for March 25, 2019: Spot fell. Paper too. And steel. CISA output remains off its face. I’m beginning to tilt bearish here. Vale remains a rolling bullish shock but the fundamental set up is poor. There are huge piles of steel inventory sitting in China. Output is completely uninhibited by any pollution
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 March 24, 2019: Spot up on the Pilbara cyclone. Everything else at peace. Here’s the latest image: RIO’s Cape Lambert facilities are very close to the red zone. That’s 200mt of capacity at risk. The best case is going to lose a week’s worth of shipments which will not help Q1 GDP.
Via The West: China could slash its iron ore imports 40 per cent as its Government winds down its stimulus of an overpriced housing sector, which would have disastrous consequences for Australian iron ore producers, a conference in Perth was told yesterday. J Capital partner and iron ore and steel analyst Tim Murray said China’s
Iron ore prices for March 20, 2019: Spot hammered. Paper worse. Steel fine. Chinese iron ore port stock lifted to 148.2mt last week. Bloomie has more on Brucutu: Bradesco BBI, Thiago Lofiego Positive development for Vale. However, it’s still uncertain if the company can regain the provisional operating license under which it operated the Laranjeiras
Iron ore price for March 19, 2019: Spot down. Paper down more. Steel stable. The news is all good for Vale this morning, via Vertical Group: VALE SAYS COURT ALLOWED OPS TO RESUME WITH LARANJEIRAS DAM. This news is effectively 30Mmtpa that just came back on-line, unexpectedly, for Vale. This quite bad for iron ore
Iron ore prices for March 14, 2019: Spot still range trading. We still don’t know where it is going. Same for the broader ferrous complex. Yesterday’s Chines data suggested that a headwind is still developing in real estate with sales still falling year on year and starts beginning to catch down: That is, despite
Iron ore price charts for March 12, 2019: Spot bounced. Paper firmed. Steel jumped. There’s still no clarity here, a point made nicely by Clyde Russell: The first fact worth noting is that China, which produces just over half of the world’s steel, hasn’t really slowed output of the metal much, despite considerable media reporting of
Iron ore prices for March 9, 2018: Spot crunched. Paper more so overnight. Coking coal too. Steel OK. Chinese trade data showed a mixed picture with steel export up decently year on year over Jan/Feb: But that is usually a bearish signal for Chinese steel demand which only ships more oversees when local conditions deteriorate.
Iron ore prices for March 5, 2019: Spot defied paper falls. Steel fell. Coking coal is stable. Platts describes the fog surrounding Vale today: The iron ore market could lose as much as 90 million mt/year of supplies from Brazil — about a quarter of the country’s total export capacity — from output curbs following
Iron ore prices for March 4, 2019: Spot down. Paper down more. Coking coal stable. Steel strong. We’re entering a seasonal period when iron ore would normally be falling but that has been badly compromised by the Vale accident and Chinese stimulus efforts such as they are. That has destocking mills battling with other extraneous
by Chris Becker The iron ore complex finally stopped their near 7 day losing streak with a blip higher in spot prices yesterday, with Tianjin spot up nearly 2% as the disappointing Chinese PMI figures failed to translate into anything meaningful. Supply is still not a concern with production stats in from the World Steel
by Chris Becker Iron ore prices continue to slide with both spot and futures markets putting in a sixth straight loss. Port inventories rose to just over 145 million tonnes last week, the highest since September 2018, but steel demand should kick in soon. Texture from Reuters: The spring period beginning in March, after China’s
by Chris Becker Iron ore prices nearly hit a monthly low yesterday as reduced steel production and increased Brazilian exports weighed on the complex. Dalian prices are down nearly 10%, although rebar prices continue to climb: From IG: Brazil’s daily exports reached 1.4 million tonnes of iron ore per business day, despite last month’s mine
by Chris Becker The iron ore complex was not buoyed by positive statements from the US and China trade delegations yesterday, with spot prices in Tianjin plus Dalian futures falling as restocking levels are not as strong as expected following the Lunar New Year holiday: More on the restocking from SPGlobal: Traded levels for Australian Pilbara
by Chris Becker The iron ore complex was relatively quiet on Friday with spot prices retreating slightly, futures edged higher on anticipation of advancements in US/China trade talks: Meanwhile, the supply hits keep on coming with Brazilian supply at risk again throughout 2019. Texture from Mining.com: Excluding Vale (NYSE:VALE), close to 8 million tonnes of
Iron ore prices for February 21, 2019: Spot down. Paper down more. Steel up. Steel output remains very high. If bulks are really going to come off owing to weak demand I’s like to see output fall from these levels. Argus has some nice texture on mill raw materials management: Most mills surveyed by Argus
Iron ore prices for February 18, 2019: Spot and paper up. Steel down. Ferrous and steel markets are headed in opposite directions. This is unsustainable as Chinese steel mill profits collapse. Normally, bulks would getting caned right about now but the artificial prop is Vale, via AFR: Brazil’s government on Monday banned new upstream mining
Iron ore prices for February 14, 2019: We may be setting some kind of trading range in the $80s here but we’ll have to wait and see. I still expect mills to destock violently the moment they feel secure about Vale supplies. The signs in yesterday’s Chinese trade data confirm as much. Iron ore imports
Iron ore prices for February 12, 2019: Spot is tumbling. Paper fell further overnight. The panic is ebbing. Clyde Russell has a nice little piece on where we’re headed: Firstly, Chinese steel mills can substitute higher-quality iron ore with lower grades, which are likely to be more readily available, but this will result in lower
Iron ore prices for February 11, 2018: Spot did its dash and paper flamed out overnight. Chinese steel production has started the year in decent shape. Who knows when the price spike will be over? The best way to think about it is temporary, via Westpac: Vale disaster boosts the spot price of iron ore
Iron ore prices for February 8, 2019: Spot to the moon. Paper too. Chinese steel trade resumes today. Expect price fireworks over the next few months. Then just as spectacular a crash as the Vale dust clears. The bulk commodity rocket has all but wiped out Chinese steel mill margins and the moment clarity is