Iron ore price

Viewing posts in the Iron ore price category

Comrade Colin reams WA taxpayers

broken-promises-logo1-200x200 What a blessed state it is to be miner in Australia. When it's all boom you get to dictate your own tax rates and when it goes bust you get handouts. From The Australian: Acting WA Mines Minister Ken Baston told The Australian that the royalty rebate was intended to provide temporary relief for junior miners while they restructured their operations “in the face of a sudden and dramatic commodity price fall”. “All applications for royalty relief will be carefully assessed to ensure each applicant is implementing measures to reduce their operating costs,” Mr Baston said. “These...
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Daily iron ore price update (free fall)

anvil Here are the iron ore charts for January 26, 2015:     Carnage. Paper markets aren't too bad with the 12 month trying to find a bottom and six month futures still not at new lows (don't blink). But the bottom has fallen out of physical markets with Qingdao iron ore down 4.3% yesterday to $63.54 (above table is two days). Benchmark fell to $2.60 to $63.30. Chines port inventories fell again, by 450k tonnes, but remain high, Rebar average is toast and I've added a long term chart for perspective. Steel demand clearly stinks. Reuters has texture: Cooling Chinese steel...
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UBS: Big miners aiming for “Goldilocks” price

Goldilocks_and_the_three_bears From the AFR: UBS mining analyst Glyn Lawcock says...BHP, Rio, Fortescue Metals and Brazil’s Vale...want a “Goldilocks” price at which only they have the ­incentive to expand, new players cannot enter the market and their smaller rivals are locked in a desperate fight for survival. “The low cost incumbents at the bottom of the cost curve want a price that doesn’t deter them from investing, that makes a good return for them, but not too good a return such that it encourages new entrants and competitors,” Lawcock says. ...The price would be about $US56 a tonne, Lawcock says, at US80¢...
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‘Draghi put’ floats miners as iron ore sinks (updated)

theark Is Mario Draghi a Chinese property developer? No? So why are Australian mining stocks off to the races today? The reason is that markets constantly mis-price and hence offer endless second chances to enter trades, in this case short, as iron ore goes one way, and major miners the other. BHP is up 2%, RIO up 1.4%, and FMG is up 2.3%. Here are the indexes:  The idiocy spreads are superbly named today as they widen: But juniors are taking it firmly in the team as ARI nicely demonstrated their imminent futures: There is nothing in the steel market to justify this price action and Dalian...
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600 jobs go as Arrium shuts high-cost mine

url And so the great iron ore junior wind-down begins, from The Australian: Iron ore miner and steelmaker Arrium has said it has been forced to shutter one of its mines due to the sharp fall in the price of the commodity. Arrium said it would “mothball” its higher-cost Southern Iron operation in South Australia by the end of June and focus its efforts on its lower-cost Middleback Ranges operation. The move means it will now target around 9 million tonnes per year of iron ore sales, down from current annual production rates of around 13 million tonnes. Mothballing an asset means production ceases...
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On iron ore “morons”

Dumb-and-Dumber-jim-carrey-1 Charlie Aitken is angry, from The Australian: “WHAT the f. .k is wrong with these morons?” That’s the question Bell Potter’s head of institutional equities, Angus Aitken, is asking about Rio Tinto management — particularly CEO Sam Walsh — in a note to clients that is an early contender for rant of the year. Aitken is upset that Rio is using its position as the lowest cost producer of iron ore sold to the key Chinese market to pump out oodles of the stuff, keeping prices depressed. He reckons Rio should “tone down the production and the price will rise” — along with Rio’s...
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Daily iron ore price update (down she goes)

anvil Here are the iron ore charts for January 22, 2015: Paper is burning. Physical too. Though benchmark held above its December low at $66.30 while Qingdao fell through its. Of the three descending triangle patterns in the above three charts, two have now broken, the third must soon. Rebar and coking coal are still tumbling. We are into another leg down. Texture from Reuters: "Poor steel margins are hurting smaller steel mills in China, especially given the current state of tight credit where they have very little cash to be able to withstand losses," said a Singapore-based trader. And...
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Fortescue plunges to new lows as iron ore set to break

MCDNOAH EC011 Yes, it was all good this morning with Super Mario's funny money blinding the sharemarket to what's happening in iron ore, with BHP, RIO and FMG soaring majestically into the firmament. But reality has struck this afternoon with Dalian iron ore futures rapidly unwinding gains for the big two (though still up). FMG meanwhile is down 5% to a new post-2009 low at $2.21, on its march back to $1.80 and restructuring. Here are the index charts: The idiocy spreads are taking a breather today but the trends are clear: The juniors are all down too, except ARI which may be benefiting from the...
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Daily iron ore price update (get shorty)

anvil Here are the iron ore charts for January 21st, 2015: These charts are bad. Paper is rolling fast. Singapore 12 month swap has blasted through it's all time low. Dalian six month futures weakened materially yesterday as well. Qingdao is only $1 above its low and benchmark sank 1.3% to $66.40, only 80 cents above its low. All three have bearish descending triangle chart patterns and the first has already broken down. Worse, rebar is off to Hades suggesting very strongly that steel demand around construction absolutely stinks. Reuters has texture: The abundant supply of the steelmaking...
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QLD Left attacks Comrade Campbell’s coal quango

1 You know when your plodding through the ideological labyrinth that is Australian politics when this happens to the massive Abbot Point coal project: The government has offered funds to help build shared-use infrastructure, such as a rail line or airport, from its asset privatisation and lease plan. The LNP is yet to put a figure on how much it is willing to contribute, but an Indian media report put it at $400 million. Indian company Adani, which is hoping to raise funds to begin work on its Carmichael project, set to be the nation's biggest coal mine, has said it does not need the...
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Dead cat screeches as miners take-off

2 It's all good today for the iron ore majors today with RIO up 3% and BHP up 1.5%, However, poor old FMG is down a touch. Here are the updated indexes: The idiocy spreads continue to close and in FMG's case an "IQ spread" discounting equity to the iron ore price is developing: The juniors brief gasp for life continues to expire: There's no real reason for it. Yesterday's Chinese data was horrible for miners. Oil is down, too, for BHP. Dalian is off 2 points. No doubt it's a generalised gamble on Super Mario...
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S&P shreds iron ore forecast, downgrades next

MCDNOAH EC011 From S&P via CNBC: The agency revised down its iron ore price forecast to $65 per tonne for 2015 and 2016, from $85 per tonne. It cut its copper price forecast to $2.70 per pound ($5,952.50 a tonne) in 2015 and 2016, from $3.10, it said in a release. "Given our new assumed prices for iron ore and copper, we expect changes to our credit ratings and outlooks on some entities in the coming weeks," Standard & Poor's credit analyst Elad Jelasko said. "While the fundamentals for other industrial metals, such as aluminum, nickel, and zinc, remain positive, we believe the slowdown in the global...
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BHP prepares to slash and burn

images The BHP Q4 production is out and was unremarkable in volume terms, a littler short of expectations: Group production increased by 9% during the December 2014 half year with records achieved for eight operations and five commodities. Production guidance remains unchanged and we are on track to deliver Group production growth of 16% over the two years to the end of the 2015 financial year. Metallurgical coal production increased by 21% to 26 Mt in the December 2014 half year as Queensland Coal and Illawarra Coal both achieved record half year volumes. Western Australia Iron Ore production...
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Daily iron ore price update (a bad day)

anvil Here are the iron ore charts for January 20, 2015: Singapore 12 month swaps are within a whisker of breaking to new lows. In a curious inversion from last year, Dalian six months futures are holding up better. Spot is flirting with new lows as well. Rebar is in free fall and is the trigger for the next round of iron ore repricing. According to Clyde Russell of Reuters it's all the miners fault: Much recent commentary has focused on how commodity producing companies and nations are going to suffer from China's changing economy. ...This ignores that much of the decline in commodity...
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Pilbara ports re-open

imgres From The Authority: Pilbara Ports Authority has reopened the ports of Port Hedland and Dampier at 5am (AWST) this morning, Tuesday 20 January 2015. The port of Port Hedland was officially closed for 10 hours. The port of Dampier was officially closed for 17...
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Atlas Iron hangs on

zombieminers The second of the quarterly production reports out today is from Atlas Iron: THE ATLAS BUSINESS  Globally competitive costs, costs continuing to fall and targeting lower end of FY15 guidance  Normalised EBITDA^ YTD is approximately breakeven, despite challenging market conditions  North Pilbara mine development now complete  Stable production and shipping volumes, reliable operators  Well established and diverse customer base  Strong leverage to increases in A$ iron ore price  Significant Pilbara port rights and iron ore resource inventory  Opportunities to further...
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RIO pays the volumes price

imgres RIO has released its Q4 '14 production report and all that matters is iron ore: Pilbara operations 2014 production of 280.6 million tonnes (Rio Tinto share 224.9 million tonnes) was 12 per cent higher than the same period in 2013 and set a new annual record, driven by the early completion of the 290 million tonnes per annum (Mt/a) expansion project in the first half and increased mined production. Almost 90 per cent of the additional 30 million tonnes produced in 2014 has gone directly into the premium Pilbara Blend, the industry reference for the 62 per cent Fe market. Pilbara sales Record...
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Daily iron ore price update (soft steel)

anvil Here are the iron ore charts for January 19, 2015: Fairly hum drum action with short term paper markets still firm and long term still hovering near lows. Qingdao is weak and benchmark fell a little to $67.80. The big mover right now is steel prices, in the wrong direction of course, and the if the slide in rebar were to persist then one would have to bring forward forecast H2 2015 weakness. Steel mills could accelerate destocking, although the last chart shows their margins remains strong (provided they use imported ore). Or, mills could do the following, from Reuters: "Considering...
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Major miner idiocy spreads screaming shut

trhyug Regular readers will recall that last year I christened the term, "idiocy spreads" to capture the absurd divergence that transpired between firm major miner share prices and weakening underlying commodity prices, especially iron ore. That idiocy has ended for some but not others. Here are the updated miner indexes versus iron ore for the majors: None of those charts are very healthy! And here's the idiocy spreads updated: FMG is finally looking rational having closed its spread to iron ore completely and now outpacing it. BHP is galloping closed as well, helped along by oil price...
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Pilbara ports evacuate on cyclone warning

IDW60280 From Pilbara Ports: Due to a Tropical Low tracking towards the Pilbara region, Pilbara Ports Authority has begun evacuation procedures at both the ports of Port Hedland and Dampier. Anchorage evacuation commenced Monday morning (19 January 2015) at both ports. Both ports expect berth evacuation to be complete by Monday evening (19 January 2015). It looks pretty minor, disruption should be...
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Morgan Stanley says catch mining’s falling knife

smallfallingknife For MS today: Short-term volatility is exacerbating the mining cycle at this time. However, as we look to 2016, the nature of the cycle suggests that in hindsight now will be viewed as the wrong time to capitulate. Exposure to companies with quality assets and sound fiscal position should be increased. Mining equities already capturing in spot prices: Further EPS downgrades are implied on a MtM basis but the mining equities have already priced this in (pg 4). Mining cycle is approaching a turning point: Capex has peaked and productivity is rising. Ratios such as a ~7% Fwd RoCE for BHP and...
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Daily iron ore price update (2015′s biggest loser)

anvil Happy New Year and good to be back. Apologies for lateness today, data issues. Here are the iron ore charts for January 16, 2015: So, where are we? Short term paper markets have rebounded a little from last year but longer term remain suppressed and spot remains near its lows. Chinese steel production ended the year in reasonable shape and up a couple of percent on the year but rebar average is currently taking another leg down. Port inventories of iron ore, as well as mill stocks have still been falling. Though the former remains moderately high, this indicates that Chinese mills...
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Daily iron ore price update (Vale credit)

Vale-Brasil-40[1] by Chris Becker A small uptick in spot and swaps overnight but the complex is still below the $70USD tonne barrier: Looks like Brazilian based iron ore major Vale is seeing a blowout in its CDS (credit default swaps) as the falling Brazilian Real weighs on its debt problem. From Acting Man: Vale’s problem is that its total debt amounts to more than $30 billion – and a very large chunk of it is in fact denominated in US dollars. As a result, the decline in the dollar price of iron ore is more relevant to the company than it would otherwise be. To be fair, it also holds about $7.8...
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Help us China, you’re our only hope

FILE CHINA ECONOMY EXPORT Cross posted from The Conversation by James Laurenceson Deputy Director and Professor, Australia-China Relations Institute (ACRI) at University of Technology, Sydney Wayne Swan couldn’t do it. Joe Hockey has tried and failed. Getting the budget back in black is proving to be mission impossible. But it could be a whole lot worse. The Commonwealth Government’s bottom line has been getting a boost from an unappreciated source. That source is China. These days China is more often painted as a villain in the budget saga. Take the Mid-Year Economic and Fiscal Outlook (MYEFO) released last month as...
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Daily iron ore price update (slipping)

Falling-Sandcastle by Chris Becker Looks like nothing can stop the slide in the iron ore complex with falls across the board in spot, swap, Dalian and rebar futures (May) and benchmark fines almost at a five year low:   And the charts:   With Citi forecasting a sub-$60 level for the remainder of the year and no restocking in sight as mills use laden port stocks as seaborne supply continues apace the equation has not changed for iron ore in either the medium or long term.  It hasn't stopped the push for new mines being opened in Western Australia, where its seems desperation has set in as the...
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