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E-mailLondon, 7 August 2009
The Steel Index daily iron ore price reference price reached US$104.1 per dry metric tonne today. The price, published daily for 62% Fe content fines delivered China, and has today surged upward, increasing by 5.0% on yesterday and 9.2% over the week. This is the highest level since the index was first published on 17th November 2008.
The price has rallied strongly from a low of US$59.1/dmt in March 2009, firming rapidly over the last month to hit today’s high of US$104.1/dmt. This is a 28% increase over the past 4 weeks.“The recent increase highlights the volatility in the iron ore market and the crucial role TSI plays in providing reliable daily price information,” says Steven Randall, Managing Director of TSI. “In this environment more and more companies are looking to index-based price arrangements, often hand-in-hand with OTC swaps to manage their price risk.”
The strength of the physical spot market has pushed swap prices higher for the coming months. Brokers clearing through the Singapore Exchange ( SGX) and the London Clearing House (LCH) are reporting swaps at over US$100/dmt for the five months until the end of the year.
TSI is the only iron ore index used for settling over-the-counter cleared swaps. Singapore Exchange and LCH.Clearnet both offer cleared iron ore swaps contracts settling exclusively against the monthly average of TSI’s daily 62% Fe iron ore reference prices published in the expiring month.
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