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 (China reaches for the revolver)

The ferrous complex tumbled on February 22, 2021: The big news is this: China is escalating its intervention into iron ore markets by reportedly setting up a single, state-backed platform for purchasing the bulk commodity in a move that could have far-reaching implications on Australia’s top export and its producers. Beijing is planning to make

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Daily iron ore price update ($100)

The ferrous complex bounced on Friday 18 February 2022 after a brutal week of selling: There is nothing to suggest any improvement in fundamentals. Adjusted for LNY, steel demand and supply look very weak: Westpac’s Robert Rennie is onto it: “Many commodities have critically low inventories, but there’s no sign of that in iron ore

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Daily iron ore price update (done and dusted)

The ferrous complex was hammered again on February 17, 2022 as spot was hit, paper crashed overnight and steel is in retreat: The reasons are obvious: Chinese authority has asked some iron ore trading companies to release “excessively high” inventory and bring the stocks to reasonable levels as soon as possible, following a joint investigation

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Immense discounting hammers Fortescue

Fortescue’s half-year was an eye-popper: • Ongoing improvement in safety with the Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 December 2021, 14 per cent lower than 31 December 2020 • Strong operating performance across the supply chain contributed to record half year iron ore shipments of 93.1 million

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Daily iron ore price update (limit down again)

The ferrous complex was smashed again on February 15, 2022: Bloomie has more: On Tuesday, some Chinese iron ore trading firms were summoned to a meeting with a trio of powerful government departments — including the markets regulator, the economic planning agency, and the securities regulator — to discuss “abnormal” prices. The companies were warned against

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Commodity prices are bonkers

Wall Street’s commodities bubble is going swimmingly. The latest bucket shop to push the new ‘supercycle’ is Morgan Stanley: Commodities outperformed equities in 2021, but only for the second time in a decade. It didn’t used to be like this: in half the years between 1970 and 2010, commodities beat equities. Given several tailwinds, we

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Daily iron ore price update (thin boom)

The ferrous complex powered on January 27, 2022: Clyde Russell is useful today:  Iron ore is enjoying a rally built largely on two factors that have yet to eventuate, a renewed building boom in China and possible supply disruptions in top exporter Australia. On the first, any Chinese rebound is, at this stage lacking any

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Daily iron ore price update (Ukraine bid)

The ferrous complex is reaching into the higher airs as the Ukraine bid charges the market: There is nothing to support this fundamentally, as we see in steel lagging. Chinese property continues to deteriorate: Property sales are terrible. Down 30% on the year along with starts. Funding for developers shows no turn at all: There

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Daily iron ore price update (flame out)

The ferrous complex flamed out on January 24, 2022: Not much to report beyond global market jitters. Chinese property is chewing through its problems: China’s efforts to spur asset sales by cash-strapped developers are starting to gain momentum with a flurry of deals involving state-run rivals, potentially easing the industry’s debt crisis. In recent days,