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- Iron ore has outperformed most major commodity prices to date in 2016, supported by lower seaborne supply and moderate restocking by Chinese steelmakers around Chinese New Year.
- Divergences between seaborne iron ore prices and onshore Chinese port stock prices have increased, and may become a more regular phenomenon moving forward as supply resumes a greater role in seaborne iron ore price formation.
- Despite the recent mini-rally in spot iron ore prices, far-dated futures prices have fallen and backwardation of the iron ore forward curve has more than doubled as a result.
- The SGX iron ore forward curve prices the majority of iron ore derivative open interest globally, and represents a useful tool reflecting future price expectations and investor positioning in the market.
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