By Min Zhang and Tom Daly
Dec 18 (Reuters) - Prices for iron ore have more than doubled in 2020, putting the steelmaking raw material on track to be the top-performing major commodity globally for a second straight year as speculative money floods in and Chinese demand holds firm.
Steelmakers in China, the world's biggest producer of the metal, have joined the country's industry association and operator of its flagship iron ore futures contract in calling for a probe into the "abnormal" price rally that has eroded their margins.
The most active iron ore futures DCIOcv1 on the Dalian Commodity Exchange have gained 35% this quarter and 17% in December alone. They were up 116% year-to-date as of Dec. 18, while Platts' CFR China 62% iron ore index has climbed more than 72%.
Below is a list, in chronological order, of key milestones in the recent rally and steps taken to try to calm the market.
* Dec. 2 : Brazilian iron ore miner Vale VALE3.SA cut its 2020 output outlook and this adds fuel to rising iron ore prices. Dec. 3: China's Dalian Commodity Exchange (DCE) imposes limits on single-day open positions for the May 2021 iron ore contract as prices power towards 900 yuan ($138) per tonne. Dec. 4: The DCE reminds members to trade rationally and step up risk-prevention measures after iron ore futures DCIOcv1 hit a record 974 yuan per tonne. Dec. 9: Goldman Sachs (NYSE:GS) raises its iron ore price forecast for 2021 to $120 per tonne from $90, citing strong Chinese steel production and recovering demand in the West. These sentiments are echoed by Australian miner Fortescue Metals Group FMG.AX . the same day, the DCE further restricts single-day open positions on its most active iron ore contract and adjusts speculative margin requirements. Dec. 10: The world's biggest iron ore export hub, Port Hedland in Australia, starts clearing large vessels out of the port after a cyclone warning. BHP Group BHP.AX later assures the China Iron & Steel Association (CISA) its monthly shipment volumes won't be affected. the same day, CISA holds a symposium with major steelmakers in China, who call on regulators to investigate the spike in iron ore prices and crack down on any wrongdoing. Dec. 11: The most-traded DCE iron ore futures break above 1,000 yuan per tonne for the first time, hitting a record 1,042 yuan. Dec. 12: The DCE proposes regularly adjusting premiums and discounts for iron ore futures and adding deliverable brands, following complaints from steel producers that speculators are fuelling the rally. Dec. 14: China's market regulator publishes new standards for steel scrap, giving mills greater access to an alternative raw material to iron ore even after a ban on solid waste imports from end-2020. The new standards were developed in just a year, versus the usual processing time of several years. Dec. 16: CISA holds a video call with Rio Tinto (LON:RIO) RIO.AX after learning the miner has been making continuous high-price iron ore transactions. Rio Tinto says it is willing to work with consumers to review the iron ore pricing mechanism. Dec. 18: The most active DCE iron ore contract rises more than 3% in morning trade hitting an all-time high. = 6.5321 yuan)
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https://tmsnrt.rs/37tv0CF
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