Iron ore price

Viewing posts in the Iron ore price category

Fortescue keeps building the arc

sfq Fortescue has released its full year profit results today and they are again very conservative.  Profits jumped 56% to $2.7billion in 2014, as production costs fell with capex and volumes soared. That was slightly behind estimates. Stephen Pearce, CFO, said he will repay another $500m of the firm's debt in October, continuing the campaign to lower leverage which has already seen the redemption of $3.1 billion in debt ahead of schedule. The dividend was raised from 10 cents to 20 cents. Here are some charts from the presentation. Broad metrics look good: Margins are getting squeezed (and...
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Daily iron ore price update (weak) (members)

anvil Here are the iron ore charts for August 19, 2014: Still a very weak market. 12 month swaps held on but Dalian is sinking to new lows daily. Same goes for rebar futures. In physical markets, rebar average continues to fade away as well, though iron ore spot is holding up. The BDI cape rally stalled. Were we at any other point in the cycle I would be crying "lower prices ahead" but Q4 is a reliable restock and even though underlying demand is weakening it should go ahead. Housing will have to enter virtual crisis to prevent it, which is not at all impossible but the not the base case (for...
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The big Australian hammered

images Late yesterday the big Australian booked a profit of $US13.83 billion, up 23.2%. Underlying profit rose 10.1% missing consensus slightly. Revenue for the year was up 1.9% to $US67.21 billion as production growth slightly outweighed price falls. However, EBIT was own $US3.4bn. The US62c fully franked dividend was up 4% on last year. London hated it, selling it down 5% overnight in a rising market. JP Morgan has a net pros and cons summary: The negatives Investors potentially no longer need to own a large stake in BHP Ltd to gain a large stake in NewCo. BHP is now trading at...
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Iron ore zombie rises!

imgres Iron ore junior Arrium reported today and is soaring nearly 10%. From Mac Bank: ARI reported FY14 underlying NPAT of $296m (Macquarie at $285m). Reported NPAT was $205m. It declared a 2H14 unfranked dividend of 3cps (in line with our estimate of 3cps). Mining EBIT of $481m was slightly ahead of our forecast EBIT of $469m. ARI has indicated that it is operating at a ~13Mtpa sales rate from 1Q13. Mining Consumables EBIT of $140m, was also slightly ahead of our $136m forecast. FY14 Australasia rail wheel volumes were down 46% on pcp and grinding media down 9% due to the Indonesia export...
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Daily iron ore price update (more) (members)

fdga Here are the iron ore charts for August 18, 2014:   Paper markets continue to slide. 12 month swap is only $1 above a new low. Rebar futures are at record lows. Physical is also weak with rebar average at record lows but the BDI cape jumped another 4%. In news CISA fast data had large and medium sized steel mill output rose 3.6% in early August reversing its big July slump. The defining issue remains Chinese property. Reuters has texture: "Demand for construction steel products hasn't really picked up despite efforts by local governments to ease restrictions on...
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Daily iron ore price update: mixed messages (members)

dsfg Here are the iron ore charts for 15th August, 2014: Paper markets were up Friday but not with any conviction. Rebar futures remain near all time lows. In physical markets, iron ore spot prices held their ground but rebar average has broken to a record low. Port stocks fell 690k tonnes on the week but remain huge. BDI cape jumped to its highest since March. The technicals are weak but there's not much direction. Reuters has texture: Steel stocks in the world's biggest consumer fell to 12.78 million tonnes last week, according to industry consultancy Mysteel, the lowest since...
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Fortescue discounting product again?

Capture Steel First is reporting that: Fortescue Metals Group has lowered the price adjustment on September deliveries of one of its main iron ore products, Steel First understands. No more to add but not...
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Daily iron ore price update (break)

sdf Here are the iron ore charts for August 15th, 2014: More weakness in paper markets. 12 month swap is still $1.61 above it's 2014 low but Dalian has dropped through the trap door to new lows. Rebar futures are also poised for all time lows. Physical spot held up but rebar average is right on its 2014 low and looks likely to take it out in short order. The BDI cape has gone bananas, up another 20% and approaching July highs. An article from Fairfax forecasts price rises: The benchmark iron ore price may have fallen to a 55-day low, but most signals suggest the price will rebound...
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PBOC gives stimulus the bird as iron ore futures sink (members)

sdfa Perhaps markets are on a 24 hour delay switch because they are starting to react to the dreadful Chinese data. The Aussie is selling today and iron ore futures opened at a record low of 657 yuan before rebounding to 660 now, down 4 points. Rebar futures are down half percent as well. The big miners are all taking a shellacking too though for some reason markets are bidding small miners on the presumption that they are going to be acquired, even though they have no business model. Moreover, via Forexlive, the People's Bank of China (PBOC) is having none of it! From Financial News, the...
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Daily iron ore price update (bottom?) (members)

anvil Here are the iron ore price charts for 13th August, 2014:   Not much to recommend the market, though paper held up better than Chinese data did. Rebar futures have retraced much of their recent gain. Physical looks weak too but the BDI cape rocketed another 14.5% and is signalling a restock, no doubt minor but on nonetheless. I expect we're near or at the downside limit for iron ore spot for now. But for how long? The macro data is awful (see here today), and steel markets are weakening on seasonality to boot. From Reuters: China's daily crude steel output fell 4.6 percent...
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China’s shocking data has a message

;in The bizarre under reaction to China's terrible data output yesterday rolls on, making no appearance in the Australian media today and, more to the point, triggering a global after party! Just in case you missed it, here are the charts: I know all of the arguments. A sudden stop in credit in China is combatable because the government owns the banks. It's true. But the government does not own the shadow banking system quite so much. And that is where the real problem is: Let's be clear, such a shadow bank contraction is rare. One of this magnitude is unprecedented. In the midst of...
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Iron ore equities still dreamin’ (members)

asfw An update today on the iron ore price and iron ore equities nexus. Here is the major miner's relative performance chart: RIO especially has been powering, up 20% or so since its May low, though still unable to breach a new high for 2014. BHP likewise (remember that this is an index chart). The market jury is still out on FMG though the last time it was at this price iron ore was a lot higher. The juniors have also seen a good rally:   This is more about the hope of corporate action. As we saw this week with BCI, there are still plenty of dills out there willing to pay for high...
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Daily iron ore price update (slap) (members)

anvil Here are the iron ore charts for August 12, 2014: A bad day. All paper markets are threatening breakdown. 12 month swap has a head and shoulders formation with a busted neckline and is only $2.5 above its 2014 low. Dalian 6 month futures are worse, only 6 points above the 2014 low with a rock solid downtrend in place. Rebar futures are sliding away as well. In physical, rebar average is only 3 points from an all time low. Spot iron ore is galloping south and also has a head and shoulders top pattern with a busted neckline. Texture from Reuters: "The market is still under the shadow...
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Dreaming of iron ore bears

Capture It's one the of the more drudgerous tasks in my job description but I'm required to point out weak analysis when it appears. Glenn Dyer of Crikey likes to dabble in iron ore markets, usually for the sole purpose to declaring "doom and gloom" wrong, and has done so again at Share Cafe recently: The big rise in Chinese exports in July and the fall in imports grabbed the headlines, but for Australia the important data was the third highest level of iron ore imports on record - contrary to what the forecasts of falling sales and prices from the usual collection of worryworts and local 'experts' in...
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“Coal always wins” vs “everything but coal”

imgres This morning our magnificent business daily ran with the headline that "coal always wins" delivered directly from Peabody Coal: Peabody Energy chief executive Greg Boyce is calling on coal producers to spend more time and money fighting “symbolic” movements against the industry and is confident China will not adopt a cap on carbon emissions. As the anti-coal collective gathers more mainstream backers, St Louis-based Mr Boyce says the industry needs to do more to counter the attacks, particularly the global fossil fuels divestment campaign. But he is confident that “coal always wins...
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What could rebound the iron ore price?

fdgr A couple of useful charts today from Morgan Stanley. Chinese mills have restocked iron ore to the highest levels since Q1: But steel inventories are low and very low at traders: Poor long product demand (used in building) is offsetting firm short product demand (used in cars etc) and the end result is low inventories. To see a turn in the market, property will need to bounce with enough vigour that the decline in the rate of construction growth reverses. That will need six months of rising house prices. As we know, prices were still accelerating down in July, though the last few weeks...
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Daily iron ore price update (weak)

wew Here are the iron ore charts for August 11, 2014: Paper markets are weak with rebar futures down as well. Physical is also weak but the BDI cape did rise 2.5%. This market is going nowhere right now. Chinese steel production is weakening seasonally but I'd have to see a new downtrend in rebar to begin to expect any further raw material destocking. Conversely, restocking usually begins by September in anticipation of better demand. Last year in Q4 we had a big port inventory restock going on which artificially boosted demand and absorbed the supply increases. It won't be there this...
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Iron ore zombies party on

lens18353872_1314773237the_party_is_here_zombie_ From the AFR: Kerry Stokes’s iron ore venture is set to be acquired under a takeover deal announced on Monday by established iron ore miner BC Iron. ...importantly for BC shareholders, the deal will extend the company’s mine life from about five years out to about 20 years, while giving IOH shareholders immediate access to a larger volume of export sales. Under the terms, the deal can be cancelled of the benchmark iron ore price falls below $90 per tonne for more than 20 days in a row. Here's the UBS break even chart: BCI is buggered next year when iron ore falls to $80. If the...
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Daily iron ore price update (meh) (members)

awfq Here are the iron ore charts for August 8, 2014: More pin head. Paper markets were weakish, especially Dalian six month futures which appear to be reforming their epic downtrend. Rebar futures rolled too. Physical was stable with rebar average off a bit, and the BDI cape up a bit. Some will draw succor from the 850k tonne draw down in Chinese port stocks for the week. It's better than rises, yes, but the levels are still huge. In news, it's all about shitty demand. CISA's latest batch of fortnightly fast data for late July showed a sharp fall in steel production of 3% to 1.76...
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Daily iron ore price update (Hedland headlines)

sfdwq Here are the iron ore charts for August 7, 2014: More dancing on the the pin head in paper and physical markets, including rebar futures and BDI cape. Port Headland shipments for July are out and rebounded to a record at 36.08 million tonnes: The China share fell slightly: Capacity appears to be maxed out for now. In the wider markets Reuters has texture: "I think the downside risk isn't too much at this point. The market has a better chance to go to $100 than go back to $90," said an iron ore trader in Shanghai whose company has 700,000 tonnes of Australian...
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Rio races deflation (members)

against the current The media is full of praise for yesterday afternoon's Rio results. This is no surprise given the MSM's penchant for groveling so let's dig a little deeper. At $5.1 billion for the first half (up 21%) it was a modest beat of consensus estimates at $4.9 billion (the AFR managed to cook up a much lower consensus figure somehow). Here is the rest: Increased underlying earnings by 21 per cent to $5.1 billion. Underlying earnings per share rose to 276.8 US cents. – Achieved $3.2 billion of sustainable operating cash cost improvements since 2012, exceeding the $3 billion reduction target six...
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Union blunder cans Port Hedland tug strike

imgres Our little ship of fools isn't getting time off after all: The union representing tugboat engineers has called off a planned strike at Port Hedland this weekend after realising they had made a mistake in issuing its industrial notices. It is a spectacular blunder for the union, which had hoped to raise the stakes in a protracted pay dispute with BHP Billiton shipping contractor Teekay Shipping. The Australian Institute of Marine and Power Engineers believed they could issue strike notices on shipping contractor Teekay Shipping as late as...
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Platts China steel index slides

imgres Platts has released its August Steel Sentiment Index Survey and it's unhappy reading. From Market Watch: August '14 Change from July '14 July '14 Platts China Steel Sentiment Index (Reflects New Orders) 46.97 1.07 45.90 New Domestic Orders 47.44 0.73 46.71 New Export Orders 41.54 5.12 36.42    Steel Production 34.62 -11.81 46.43    Mill Inventories 73.08 26.65 46.43    Trader Inventories 59.44 16.55 42.89     Domestic Long Steel Products Prices 64.29 14.29 50.00     Domestic Flat Steel...
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Daily iron ore price update (dream is over) (members)

Capture   Here are the iron ore price charts for August 7th, 2014:   More running on the spot in all markets including BDI cape and rebar futures. Lot's of little quotes from various players today from both Reuters and BS: Australia and New Zealand Bank said in a note that prices were likely to rise further in the coming days as steel mills move to replenish their stockpiles. Maybe, seems a bit early to me and the BDI cape is still falling. Meanwhile, BC iron is comparing today to 2012. From CEO Morgan Ball: "Prices came down and discounts on tier-two iron ore creeped...
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Port Hedland tug engineers to strike

imgres From the ABC: Tug boat engineers in Port Hedland, the country's biggest iron ore port, are launching industrial action over a pay dispute. There will be four-hour stoppages on August 9, 11 and 13. The Australian Institute of Marine and Power Engineers has notified the tug operator Teekay. Teekay, which owns the licence for towage services at the port and employs 166 crew, says it regrets the impact the stop-work will have on customers, which include BHP Billiton and Fortescue. In a statement Teekay indicated though it will not be giving into the demands of the engineers. "Teekay believes the...
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