Iron Ore and the Tragedy of the Commons
The tragedy of the commons — in this textbook economics example, neglect, misuse and narrow self-interest famously transform a shared resource into one fit for no-one. The iron ore market’s common land is the index-based pricing mechanism that underpins billions of tonnes of trade. Everybody wants a pricing mechanism that works for all, yet few are willing to do the necessary maintenance.
Now the world’s largest buyer has finally had enough and looks in danger of abandoning the system altogether. The market should take note and act before irreparable damage is done.
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As a leading authority on energy and commodity markets across the globe, Argus is uniquely positioned to provide in-depth analysis and expert thought leadership. Our white papers are carefully written by Argus specialists from across our company. Each white paper focuses on a topical theme, exploring areas such supply and demand dynamics, price trends, trading activity and changing regulations. We always aim to provide a balanced view, underpinned by data and insight gathered first hand from the market.