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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Daily iron ore price update (Dalian pin)

Spot eased. Paper was bashed Friday night. Steel is going nowhere, a standing warning for the bubble. The charts for June 14, 2019: Reuters has more: China’s Dalian Commodity Exchange said on Friday that it would raise trading limits and margins for the iron ore futures contract for September delivery , effective from June 18.

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Lunatic RBA: Resources to boom forever

Honestly, they never learn. This time from Alexandra Heath, Head of Economic Analysis at the world’s happiest central bank: Introduction Good morning and thank you to the AMEC for the invitation to be here today. The resource sector makes a significant contribution to the Australian economy. It accounts for about 20 per cent of business investment and almost 60 per cent

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Daily iron ore price update (seasons)

Iron roe prices for June 4, 2019: Spot up. Paper soft. Steel stable. Things have calmed down on demand fears but don’t forget seasonality. Chinese demand is weak through mid-year as summer rains crimp construction: If Brucutu does not return by July/August, and/or the trade war slowdown takes a breather, then it will be off

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Daily iron ore price update (FT wrong)

Spot down. Paper was bashed lower by higher DCE trading fees. Steel is stable. The FT is wrong: Steelmakers are feeling the profit pinch. There are hints of overcapacity problems ahead for Chinese producers. There, the price of hot rolled coil, a widely traded steel commodity, remains down double digits year on year. …This year

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Brazilian iron ore logjam easing?

Via FreightWaves: According to chief executive officer Birgitte Ringstad Vartdal, “Golden Ocean’s first-quarter results reflect a weaker market environment brought about by disruptions in the iron-ore trade.” She explained on the conference call with analysts, “Going into 2019, there was strong conviction in the market. Additional tons of iron ore were to come from Brazil