ABSTRACT
This chapter explores that China's rapid urbanization and high investment share of expenditure were the leading causes of the positive shock for steel demand. In 2014, BHP Billiton president iron ore, Jimmy Wilson noted: 'In anticipation of this transition, turned our focus from major supply chain investment to productivity, cost reduction and capital efficient growth more than two years ago'. The chapter shows that the price boom following China's iron ore demand shock was indicative of a competitive supply adjustment and not an orchestrated supply or price response by the Big 3 suppliers to the Asian market. The similarity between the settled prices in the Asian and European markets is another indication that the iron ore market is a globally competitive market. Given the buffer and China's decreasing demand for iron ore, it is unlikely the price will ever reach the prices achieved over the last decade.
