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 (restocking)

Iron ore prices for November 11, 2020: Empties are back bigly: The PBOC has started talking stimulus withdrawal, at Bloomie: China’s central bank once again raised the topic of exiting its monetary easing policies, in sharp contrast to the U.S. and Europe, where a resurgence in virus cases has forced governments there to consider more


If Beijing wants a divorce then let’s give it a doozy

Via The Australian: Uncertainty hangs over Australia’s $149bn in exports to China as a blockade of wine destined for the nation’s biggest trade show in Shanghai has heightened fears that a sweeping ban could follow within days. More than a dozen wine exhibitors at China’s premier trade fair have had their products stopped by Customs


Daily iron ore price update (PMI)

Iron ore prices for November 2, 2020: Spot lifted but paper was unchanged. Steel has not updated. The steel PMI improved but is still pretty ordinary: Steel inventories remain huge: Empties are back on track: It looks to me that seasonal weakness is over and restocking has resumed. Expect it to run for another two-quarters


Daily iron ore price update (PMI)

Iron ore prices for October 39, 2020: Spot up but paper down overnight. Steel has rallied in recent weeks so some pressure has come off the seasonal destocking. Empties have rebounded strongly now: The Chinese PMI was solid, driven, as usual, by construction: I will have the more granular steel PMI data tomorrow. So, we’re


Daily iron ore price update (CISA bears)

Iron ore prices for October 22, 2020: Spot down. Paper down. Empty apartment sales have stabilised but that is not enough. They must grow or steel demand will shrink as catch-up growth rolls off: CISA is bearish: That’s only mill inventories. Trader inventories are also immense, combined for easily the highest ever seasonally-adjusted: There should


Vale iron ore rips higher

Via Vale today: Vale´s Production Report for the third quarter of 2020 (3Q20) was announced on Monday, October 19th. The company is evolving with its stabilization plan and delivered a strong iron ore production in 3Q20. Nickel and Copper businesses managed to recover productivity for a solid start in 4Q20, after normalizing routine maintenance in


Daily iron ore price update (is that a shock I see before me?)

Iron ore prices for October 14, 2020: Spot down. Paper down more overnight. We’re going lower here. Indeed, I’m starting to wonder if there isn’t a little shock unfolding. Brazil is recovering steadily: More importantly, property sales in China have tanked: A few cities have tightened property curbs for investors in recent months but that