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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Find below our daily feed of market analysis

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Daily iron ore price update (the smashening)

Texture from Argus: Negative margins have forced Chinese steelmakers to cut output by more than 1mn t in August, sending domestic prices higher today. More than 30 mills in Shandong, Shaanxi, Shanxi, Gansu, Sichuan and Fujian have announced maintenance shutdowns that will cut production by at least 1.15mn t of output in August, equivalent to

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Daily iron ore price update (ferrous glut)

Texture from Reuters: “Sentiment of traders has collapsed… People don’t know how much further the iron ore will go down and everyone is desperately getting rid of the goods they hold,” a Hebei-based iron ore trader said. …However, analysts expect that iron ore prices will find support soon, as demand at mills remain firm as

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Daily iron ore price update (megacrash)

Texture from Reuters: The yuan depreciation will increase operating costs for Chinese importers, Richard Lu, senior analyst at metals consultancy CRU Group’s Beijing office said. “Steel mills will likely try to avoid buying iron ore at a weaker yuan level,” he added. “We have been cautious about iron ore for some time now and continue

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Daily iron ore price update (up escalator, down lift)

Reuters has texture: “We remain marginally bullish in our overall assessment of supply,” said Hui Heng Tan, analyst at commodities broker Marex Spectron. “Spot supply availability continues to improve as mills remain in de-stocking mode and domestic production picks up.” The demand outlook for iron ore and other steelmaking materials is not encouraging. “Margins took

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Daily iron ore price update (crashola)

Texture from Reuters: Worries about demand for steel products also weighed on iron ore, after U.S. President Donald Trump vowed to slap an additional 10% tariff on $300 billion of Chinese imports from Sept. 1. …Brazil’s iron ore exports rose 16.6% in July from the previous month to 34.3 million tonnes, the highest in nine

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Brazil iron ore exports boom!

The market still hasn’t realised it but it’s over, via Reuters: Brazil’s iron ore exports rose 16.6% in July from the previous month to 34.3 million tonnes, the highest level in nine months, as Vale resumed production at its largest mine in the state of Minas Gerais, official data showed on Thursday. July’s exports were

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Daily iron ore price update (time to die)

Reuters has the texture: Steel inventory in China stood at 12.6 million tonnes, as of July 26, the highest level in three months and 27% higher than the year-ago stockpile, said Argonaut Securities analyst Helen Lau. Steel production may remain brisk amid market talk that China’s top steelmaking city of Tangshan will extend but loosen

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Vale on track for more ore

Via Vale’s fresh financials: • We made substantial progress in 2Q19 concerning the 93 Mtpy of Iron Ore production stopped in 1Q19 with the resumption of Brucutu operations on June 22nd , 2019, recovering 30 Mtpy of production capacity, and the partial return of dry processing at the Vargem Grande complex, adding about 12Mtpy (5

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Daily iron ore price update (down, down)

Reuters has texture: Tangshan had stepped up anti-pollution measures over July 21 to 31 to meet its air quality targets, requiring some steel producers to curb their operations by up to 70%. Traders and analysts said there was talk that curbs would be extended beyond July, although the August restrictions may be less strict. The

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Daily iron ore price update (restocking)

Texture from Reuters: Average weekly shipment from Brazil decreased 8% versus June to 5.9 million tonnes, while cargoes from Australia decreased 13% to 15 million tonnes, she said, citing some industry tracking data. “The data shows shipments are not recovering and not very stable,” Lau said. “We need to closely monitor these shipments on a

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Asia “awash with Chinese steel”

Via Nikkei: Global crude steel output for the six months through June rose 4.9% on the year to an all-time high of 925.06 million tons, World Steel Association data released Friday shows. As China lifted infrastructure spending to shore up its economy, the country’s steel output grew 9.9% to 492.16 million tons, outpacing the global

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China’s failing auto sector signals the great stagnation

Via the FT: China’s shrinking car market is hitting foreign manufacturing groups hard, with some companies operating at a fraction of their potential output, sparking fears a number will be forced to quit the world’s biggest market. Ford and Peugeot owner PSA have suffered the most, with their factories running well below full capacity at

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Moody’s upgrades iron ore. Sell!

Here’s a useful contrarian indicator. The ratings agencies always come in too late on bulk commodities: » Tight iron ore supply fundamentals prompted us to revise our price-sensitivity ranges upward. Several events in Brazil and Australia have contributed to diminished supply of iron ore and we expect this situation to only slowly improve through 2019 and

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Daily iron ore price update (fighting on)

Texture from Reuters: Any production limits for steel mills during winter will be set by local governments depending on their emissions, the environment ministry said on Friday. “Markets perceive provincial restrictions to be looser than federal ones, although that does not usually play out since we have seen provincial authorities as being equally as strict,”

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Daily iron ore price update ($150!)

Texture from Reuters: Singapore-based steel and iron ore data analytics firm Tivlon Technologies is keeping its price forecast of $150 a ton by October. “We expect the launch of infrastructure projects in China to peak in the third quarter and further uplift demand for steel,” it said in a note. …China’s iron ore imports in

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Daily iron ore price update (toast)

Reuters has texture: Coking coal inventory across ports in China stood at 5.73 million tonnes, as of July 19, up 36% from a year ago and 107% this year, she said, while news of renewed audits on anti-pollution measures by mills also weighed on coking coal. However, prices had stabilised, helped by a switch to

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Buy the iron ore dip?

Via the excellent Damien Boey at Credit Suisse: Today, we have seen the Dalian iron ore futures price fall by almost 6%. Many have been expecting a pullback in prices, as supply side pressures ease. But is there more to the iron ore price story than just a supply side squeeze? After all, one could

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Fortescue kills another iron ore boom

FMG is out with its quarterly production report: QUARTERLY HIGHLIGHTS • Safety TRIFR of 2.8, an improvement of 22 per cent compared to 31 March 2019 and a record annual result • Record quarterly shipments of 46.6mt including 4.7mt of West Pilbara Fines • FY19 shipments of 167.7mt, one per cent lower than FY18 due

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Daily iron ore price update (glut)

Reuters has the texture: Overall short-term macroeconomic conditions in China remain “bearish”, said commodities broker Marex Spectron. “We continue to pick up weakness in manufacturing and construction activity, which should mean steel demand will come under pressure,” said Marex analyst Hui Heng Tan in Singapore. “We are bearish on current demand conditions (for iron ore).”

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Daily iron ore price update (Hedland hurl)

Reuters has the wrap: The most-active DCE iron ore contract closed down 1.2% at 899.5 yuan a ton, while the rest of China’s ferrous complex edged higher. “You may see some correction today, or maybe tomorrow, but generally speaking, the uptrend is intact, with demand still supporting the prices,” a Shanghai-based trader said. China’s government

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Daily iron ore price update (glowing short)

The spot price crawled higher. Paper sold off. Steel isn’t going anywhere. In news, China is hammering speculators via Dalian price hikes, at Reuters: * China’s Dalian Commodity Exchange (DCE) said it will raise transaction fees for all iron ore futures contracts to 0.01% from 0.006% of the trading value, starting July 18, the bourse