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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The oil bulls are snorting: The OPEC trade is back, and Saudi Arabia is in the driver’s seat. Just before the de facto OPEC leader doubled down on its plan to drain the oil glut, propelling Brent crude prices beyond $US60 ($78) a barrel for the first time since 2015, hedge funds were almost as bullish
Iron ore price charts for October 27, 2017: Tianjin benchmark got smoked $1.90 to $58.70. Paper recovered a little overnight. Steel fell sharply. Everything is at the bottom of recent ranges and shutdowns have not even started in earnest yet, via Reuters: “More cities, including Tangshan, have been ordered to deepen production cuts during the
Iron ore charts for October 26, 2017: Tianjin benchmark fell 0.8$ to $60.60. Paper fell further overnight. Steel futures are confused. More from Reuters: China has stepped up efforts to cut industrial production to to combat smog, which typically occurs during the winter months as industrial emissions mix with smoke from coal-fired heating units. Steel
From FMG’s September QTR production report: • Steel output in China remained at near record levels during the September 2017 quarter maintaining the strong demand for iron ore. Steel mill profitability has also remained at historically high levels and continues to incentivise blast furnaces to maximise production supporting the premium for higher grade iron ore.
Iron ore price charts for October 25, 2017: Tianjin benchmark fell 60 cents to $61.10. It is trying to hang on to $60. Paper was soft. Steel strong. Reuters has texture: Mills in northern Chinese cities are reducing production in line with the government’s orders to limit pollution over winter, helping steel prices climb 6
Via Caterpillar: Caterpillar continues to see strength in a number of industries and regions, including construction in China, on-shore oil and gas in North America, and increased capital investments by mining customers. We are working with our supply chain to increase production levels to satisfy customer demand for those markets that have improved. In July 2017, Caterpillar
Iron ore price charts for October 23, 2017: Tianjin benchmark fell 50 cents to $60.30. Paper stable overnight. Steel the same yesterday. Port stocks rose 800kt to 132.15mt last week. First, a confession. I’ve made a mistake. In the recent China September data dump I accidentally dropped the wrong data point into my China construction
Tianjin benchmark up $1.2 or 2% to $60.80. Paper lost most of Friday gains overnight. Steel futures were strong. In news, China’s NDRC hosed off growth expectations Friday: China has forced 28 cities in smog-prone northern regions to reduce emissions of airborne particles known as PM2.5 by at least 15 percent from October to March
Iron ore price charts for October 20, 2017: Tianjin benchmark fell $2.1 or 3.4% to $59.6. Paper held on overnight. Steel fell. In news, the winter shutdowns crashed the Platts steel sentiment index, via Bloomie: “We expect strict enforcement of the winter supply-cut policies in order to guarantee planned reductions in pollution,” Citigroup Inc. analysts
Iron ore price charts for October 18, 2017: Tianjin benchmark was unchanged at $61.70. Paper cracked overnight. Steel fell a little. Xi Jinping appears to have disappointed Dalian. Reuters has texture: Market participants are also watching the Communist Party congress with President Xi Jinping saying China’s campaign against corruption has achieved “overwhelming momentum” as the
Iron ore price charts for October 17, 2017: Tianjin benchmark fell 70 cents to $61.70. Paper took off overnight. Coking futures and physical and are stuck around $180. Steel is stalled. CISA output for late April was up 1.1% to 1.87mt with no sign of any shutdowns yet. Bloomie has some more on the outlook: “The
From RIO’s third QTR production report: Pilbara operations Pilbara operations produced 241.9 million tonnes (Rio Tinto share 198.4 million tonnes) in the first nine months of 2017, one per cent lower than the same period of 2016, mainly due to weather disruptions in the first half of the year. Third quarter production of 85.0 million
Iron ore price charts for October 16, 2017: Tianjin benchmark lifted 4.5% to $62.4o. Paper gave it all back overnight. Steel futures rose a bit yesterday. Port stocks fell 2.5mt last week to 130.35mt. Nothing changed for me. The path of least resistance still seems lower on the basic guess that winter shutdowns will balance
Iron ore price charts for October 9, 2017: Tianjin prices jumped 4.5% back to $60. Paper went higher still overnight. Coking coal is slowing. Steel futures went nutso! The cause of the excitement was Chinese trade data which really did impress with iron ore imports soaring to 102.8mt, highest ever by some margin: However, at
Iron ore price charts for October 12, 2017: Tianjin benchmark fell 40 cents to $57.40. Steel futures caught up to some Golden Week losses. Coking coal is saving the complex. Reuters explains: Northern China’s Shanxi province, the country’s top coal producing region, will aim to cut concentrations of hazardous airborne particles known as PM2.5 by
Dalian iron ore is falling again today: The Aussie dollar is trying to climb back above 78 cents, former support now resistance: Big Iron charts are starting to break. BHP is still in a bullish ascending triangle but is also threatening to double top: RIO is more bullish but has been turned away at resistance.
Iron ore price charts for October 11, 2017: Tianjin benchmark was hit $1.30 to $57.80. Dalian held on overnight. Coking coal did better as plant shutdowns help it. Steel futures are breaking down. Reuters has texture: Inventory of rebar, a construction steel product, among Chinese traders rose by more than 250,000 tonnes from Sept. 29
Some numbers today on bulk commodity third quarter shipments. Via UBS, first BHP: Iron ore shipments for the quarter from WAIO are forecast to be down ~11% sequentially at 63.6Mt (100% basis) based on vessel movements. This reflects scheduled port maintenance on BHP’s berths during the quarter at Port Hedland. Global iron ore production (equity)
Iron ore price charts for October 10, 2017: Tianjin benchmark cratered 4.1% to $59.10. Paper firmed. Steel futures fell but remain elevated. The FT has texture: The price of steelmaking ingredient iron ore, a major source of profit for some of the world’s biggest mining companies, has fallen below $60 a tonne on concern demand
Iron ore price charts for October 9, 2017: Tianjin benchmark fell 10 cents to $61.60, outdoing paper which firmed slightly overnight. Coking coal is falling fast. CISA mid-September output was easing as normal. The winter shutdowns are all the rage now, via Reuters: Chinese authorities have ordered heavily air-polluting industries including steel to curb output
Son of BREE is out with its commodity wish-list for September. It’s projecting declines for next year but not deep enough: Iron ore is too bullish: Australia’s iron ore export earnings increased by 32 per cent to $63 billion in 2016–17, driven in large part by higher prices. The value of Australia’s iron ore
Physical iron ore trade resumed yesterday with a whimper as Qingdao fell to $61.34 and Tianjin benchmark shed 30 cents to $61.20: Paper markets are still closed but CISA released mid-September major steel output data which fell 1% to 1.85mt per day: Pretty normal so no insight into shutdowns there yet. We also saw Port
From Mornginstar: Much has been written about China’s Belt and Road Initiative but Morningstar equity analysts think much of the overwhelmingly positive commentary lacks context and is wide of the mark. Major iron ore miners such as BHP Billiton (BLT), Rio Tinto (RIO), and Fortescue (FMG) all expect BRI to drive further growth in steel
A couple of stories today are important as China remains closed for Golden Week. Iron ore paper and physical are not trading and SGX has been running around on the spot: Last week’s iron ore port stocks jumped 2.75mt to 133.6mt: That is obviously a bearish signal coming into the break vis shutdowns dampening iron
Iron ore price charts for September 29, 2017: Tianjin benchmark fell 1.9% to trade at $61.50. Paper was flat. Steel futures eased. China is on holiday until Thursday so this week’s trade will focus on SGX. More bearishness from Bloomberg: “We anticipate the price of iron ore to remain under pressure in the coming quarter,” Geordie