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Market Fundamentals and Iron Ore Spot Prices

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  • Yiqun Ma
  • Wei Zhen

Abstract

The presence of iron ore spot prices has raised the question whether iron ore spot prices are driven by market fundamentals. We analyse iron ore spot prices over the period 2014–18 while considering a structural break. The results show that China’s steel production only affects the volatility of iron ore spot prices. Over the two subsample periods, the mean and volatility of iron ore spot prices are vulnerable to changes in port stock. Overall, in determining iron ore spot prices, the effect of supply fundamentals outweighs that of demand fundamentals.

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  • Yiqun Ma & Wei Zhen, 2020. "Market Fundamentals and Iron Ore Spot Prices," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 470-489, December.
    • Handle: RePEc:bla:ecorec:v:96:y:2020:i:315:p:470-489
    DOI: 10.1111/1475-4932.12564
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    2. Küblböck, Karin & Tröster, Bernhard & Eigner, Michael, 2022. "Hard facts and envIRONmental impacts: An overview of the global iron and steel sector," Briefing Papers 33, Austrian Foundation for Development Research (ÖFSE).
    3. Arunava Bandyopadhyay & Prabina Rajib, 2023. "The asymmetric relationship between Baltic Dry Index and commodity spot prices: evidence from nonparametric causality-in-quantiles test," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(2), pages 217-237, June.
    4. Wei, Jiangqiao & Ma, Zhe & Wang, Anjian & Li, Pengyuan & Sun, Xiaoyan & Yuan, Xiaojing & Hao, Hongchang & Jia, Hongxiang, 2022. "Multiscale nonlinear Granger causality and time-varying effect analysis of the relationship between iron ore futures and spot prices," Resources Policy, Elsevier, vol. 77(C).

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