2019-11-12 09:42:241970-01-01 00:00:00

2019 Global Iron Ore Prices

Throughout calendar 2019, a multitude of factors in an interdependent global marketplace has led to changes in the structure and dynamic of Iron Ore exports and prices on a global scale, as well as affecting domestic suppliers.  

Historically, Australia has been the largest exporter of Iron Ore. The FY18 saw 849 Million tonnes exported, worth a significant A$61 billion. China was responsible for receiving 83% of our domestic exports of iron ore, followed by Japan at 8% and South Korea at 6%. Chinese demand continues to play the dominant hand in driving the recent spike in price per tonne of the commodity.

China’s crude steel production rose 12.7% in April from March, its highest monthly level on record. Most of this increase has been driven by Australian Exports of Iron Ore as a raw input in chinese steel production. This led investors to speculate that there would be a surge in the price of Australian iron ore exports, and with the price per tonne currently at $107.54 USD (as of June 21 at market close), the price per tonne had reached its highest point since May 2014.

China’s peak steel production “season” has historically seen a spike throughout the months of March and September. This is also supportive of the increase in bulk commodity prices.

Another factor of the recent price surge may be attributed to the suffocated supply of iron ore from the world’s second largest exporter, Brazil. Brazil took out 21.6% of the global Iron Ore exports in FY18. Vale SA (NYSE: VALE) is one of the worlds largest Iron Ore miners and is a Brazilian multinational corporation engaged in metals and mining and one of the largest logistics operators in Brazil.

In January, the company’s tailings dams burst and subsequently resulted in the death of over 300 people and the suspension of all mine operations, which was lifted in April under strict conditions. Resultant of the tragedy, VALE’s share price took a -24.63% decline in the 3 days following. However, the mine was suspended again in the Brazilian courts – representing a major supply blow globally as Brucutu is Brazil’s second largest mine.

Atop this, Vale’s impact on the decrease in global output cannot be reversed by diverting resources to domestic mining campaigns, as it has stated that its Australian mines are already running at capacity. Additionally, BHP announced in its quarterly earnings in April to cut production levels, due to Cyclone Veronica disrupting operations in Queensland.

This humanitarian crisis in combination with China’s ferocious steel production growth would have played a role in the rapid price growth of iron ore globally.

Furthermore, between March 18 & March 31, Cyclone Veronica caused some of the largest domestic iron ore miners to close operation for the duration. Fortescue Metals Group’s (ASX: FMG) Port Hedland had to be closed for five days, they also experienced flooding at their railway line near the port. BHP Billiton (ASX: BHP) reported that its production was lowered by 6-8 Million tonnes from the unpreventable weather. This has further restricted the supply of Iron Ore this calendar year.

In the wider political scene, trade wars and diversion between the economic giants China and the United States continue to rage on, and if President Trump were to ramp up his tariffs on Chinese imports, Australian iron ore risks exposure to lower demand, due to a potential slowing of Chinese growth.

Inline with the significant price increases over the mid-term, Australian iron ore shares have grown rapidly over the same period. The eight largest iron ore companies on the ASX (BCI, BHP, CIA, FMG, GRR, IRD, MGX, RIO) over one year have averaged growth of 56.13% (24 June 2018 – 24 June 2019). The same group of companies averages an additional 2.7% dividend growth p.a.

With constricted supply and increased demand for Australian iron ore exports, the commodity’s bullish price run will continue to support domestic operators in the economy, supporting net export growth and as such, trickle through to support struggling GDP gains.

By William Banham

Click here for a 7 days access to our Lotus Blue Portal.

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.



KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.


Latest TV Commercial