Launceston, Australia — Imagine for a moment that iron ore was still priced the way it was for decades — in closed-door meetings between miners and steel makers — and then try to visualise what the current level would be. Whatever number you may have come up with, it’s unlikely to be anything close to the $76.57 a tonne iron ore futures traded in Singapore fetched at the close on Monday. It’s likely that it would be a far lower figure, given the current seaborne market dynamics of ample, and growing supply, and reasonable, but no longer, surging demand growth. But the main difference between the long-term contract talks that prevailed up until about 2010 and the current system of short-term deals and spot pricing is the volatility of seaborne iron ore prices. The SGX futures, which mirror the spot price for cargoes delivered to China, is up 7.4% in the first half of January, part of a longer rally that has seen it surge about 31% since the start of November. Normally a gain of this ...

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