Insight
Iron ore time spreads support spot prices
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The 62% Fe iron ore index has averaged $140/t so far this year. We have just raised our CY 2022 price forecast by 50% to $135/t CFR in our latest Global Iron Ore Strategic Planning Outlook – Q1 2022. In this note we examine iron ore time spreads – difference in iron ore price between two expiration dates – and how they compare to previous years. Time spreads are very narrow despite the iron ore price being elevated, which we believe signals support to price at around current levels, consistent with our supply/demand driven view that indicates another tight year for iron ore in 2022.
Table of contents
- Executive Summary
-
Prices to remain elevated over next two quarters at least
- Prompt values of the forward curve are in contango – M+1 vs M+2 time spreads are negative
- Q+1 vs Q+2 time spreads are trading close to zero
- Divergence between flat price and time spreads
- In summary:
Tables and charts
This report includes the following images and tables:
-
Sensitivity analysis on spot price vs time spreads – since January 2017M+1 / M+2 time spread – since January 2021M+1 / M+2 time spread – SeasonalityQ+1 / Q+2 time spread – since January 2021Q+1 / Q+2 time spread – Seasonality
What's included
This report contains:
Other reports you may be interested in
Insight
Value-in-use iron ore costs Q1 2025
Q1 2025 iron ore value-in-use adjusted costs are down 7.2% compared to last quarter, and margins increase to 46% in Q1 2025.
$5,000
Country Report
Global iron ore supply summary 2021
2021 has been a spectacular year for iron ore producers with high prices and record margins but 2022 will present new challenges
$6,750
Insight
Value-in-use iron ore costs Q4 2024
Q4 2024 iron ore value-in-use adjusted costs are up 2.1% compared to last quarter, and margins remain stable at 41% in Q4 2024.
$5,000
