Iron ore price

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Daily iron ore price update (vale Vale)

anvil-200x200-200x2001-200x200 Here are the iron ore price charts for February 26, 2015: Paper markets recovered much of their losses. The benchmark iron ore spot price fell 40 cents yesterday to $62.50 a tonne. Texture from Reuters: Physical trading hasn't kicked off yet after the holiday, and we expect the supply glut to continue weighing on the market before construction projects fully resume in a few weeks," said a Shanghai-based trader. Some Chinese steel mills have held inventories for about 10-day use and are expected to restock the raw material, given that steel demand is likely to pick up...
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Daily iron ore price update (nup)

anvil-200x200-200x200 Here are the iron ore charts for February 25, 2015: Not much joy for the post-holiday hopefuls so far. Spot was caned with Dalian and Singapore 12 month swaps are on the verge of a new breakdown. Benchmark fell 0.8% to $62.90. CISA steel output data for January shows zero growth year-on-year and as we know the World Steel Association already has the full month result in at -5% for China. Port stocks fell a little more but remain moderately high. In short, Chinese mills are back from holiday and not interested in iron ore. Texture from Reuters: "The market is still in an 'off' mode now...
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Iron ore idiot spreads explode

4 There is no stopping the great iron ore equity bear market rally! BHP and RIO are marching on again today, up 2% and 1% apiece while FMG is also up 1%. To the indexes: As you can see, both of the big players have recovered a lot of their correction losses pushing the idiocy spreads to brain-numbing wides: Even the move to price FMG sanely has not been enough to prevent the average spread from hitting a new record. The oil bounce can justify BHP's lift but RIO? So, have I erred? Am I the idiot and not the spread? For now, at least, markets have bought the notion that these miners are...
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The king of mining services topples

imgres Worley Parsons was Australia's greatest mining services firm powering to spectacular returns up to 2008 and then running strongly again afterwards (in blue):   But today it's all over with another dour profit result and, worse, delusional management, from The Australian: WorelyParsons (WOR) shares drop 11% to a 3-week low of $10.01 after reporting weak revenue growth and disappointing earnings guidance. FY15 underlying NPAT rose 3.6% to $104 million, but revenue fell 4.7%. And while second half earnings were guided to be greater than the first half,  consensus FY15 earnings of...
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Daily iron ore price update (BHP, RIO speak)

imgres-200x200-200x200 Singapore 12 month swaps fell 2 cents yesterday to $58.67 and Qingdao iron ore ore rose 63 cents to $64.01: In news, the majors are suddenly talking themselves down. Sam Walsh's RIO is rightly scathing of the Glencore "fantasy" bid (though I wonder why it says so give the support it offers his share price), from The Australian: “Part of the reason is value but part of the reason is the anti-trust and people who collect tax and what have you, they’re simply not going to let it happen,” he said. Mr Walsh added that BHP’s failed $US160 billion takeover of Rio in 2007 fell over...
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A junior iron ore miner that might actually shut

123 It's called Atlas Iron and its bleeding heavily: $139 million cash burn with only $169 cash on hand with a second half breakeven of $67-70 per tonne as it sacks, high-grades and cost-outs everything in site. In serious jeopardy but can still hang on for another 18 months at current...
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Iron ore juniors ready to expand

imgres From Bloomie, Back in November, the prospects appeared bleak for Mount Gibson Iron. Its biggest mine, Koolan Island was engulfed by seawater after the collapse of part of the 75-metre wide wall that kept out the Indian Ocean and Eric. Now with a Bloomberg index of 28 producers, including Vale and Rio Tinto, gaining 12 per cent this month and optimism prices for the steelmaking ingredient may rise from their five year-lows, Mount Gibson is studying whether to fix the wall, drain the pit and restart mining. "By the time we come to make that decision, we'll be more confident about what the outlook...
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PIMCO: Iron ore and Aussie at bottom

Capture From the SMH: Pacific Investment Management Co trimmed bets on declines in the Australian dollar, predicting iron ore prices have reached a bottom. ..."To get a true rebalancing you don't only need Aussie dollar weakness, but you need weakness followed by a period of stability," Mead said in an interview in Sydney on February 20. "If we do stay in the mid-70s for six months, then the back end of this year will probably start to look a bit better in relation to corporate investment and that cycle that we've all been waiting for could start to kick in." "The Aussie will fall a little further, so...
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BHP profits halve

the_shocker_shirt Just out on the ASX boards: BHP Billiton Ltd.'s (BHP.AU) reported 47% decline in first-half profit amid a downturn in world commodity markets, and said it had further deepened cost-cutting to counter weaker prices as a decadelong resources boom fades. BHP--the world's biggest mining company by market value--said it recorded a net profit of US$4.27 billion for the six months through December, down from a US$8.11 billion profit a year earlier. The result was higher than the median US$3.59 billion forecast of six analysts polled by The Wall Street Journal. The company said non-cash charges...
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Citi: Beware the mining rally

1 Some very solid analysis from Citi today: The miners have experienced a nice rise in 2015 so far and it is now time to figure out if this is just some positive ‘noise’ within a sector which may continue to disappoint in the next few months. Our fundamental view is that valuations in the mining sector are attractive based both on longer term valuations such as P/NPV and on shorter term metrics such as near-term dividend yields. ...That all seems positive in terms of the medium term but the one nagging issue is more near term and relates to the fact that the market seems to be inputting...
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Daily iron ore price update (slimming bulkers)

2014-12-12_upload_2415967_SIW 1151 Singapore reopened yesterday so the 12 month swap traded, losing 19 cents to $58.80. All other markets are still closed. In news, the thesis that the commodity super-cycle has s self-reinforcing dynamic at work sees more evidence with another dry-bulk shipper pushed into bankruptcy by low rates, from Reuters: South Korea's Daebo International Shipping Co Ltd filed a court receivership, a form of corporate bankruptcy, on Feb. 11, mainly due to poor dry bulk market conditions, a company official said on Monday. It is the third known bulk shipper bankruptcy this month. "The dry bulk market is in a...
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A growth industry: Australian coal whining

hectorprofile A new study today captures the defensiveness that appears to have seized Australian coal whining, from Dad's Army: AUSTRALIA’S coal sector contributed $66.2 billion to the east coast economy in one year, a ­figure top miners warn is at risk from “unsupportive” governments stifling growth. The coal exporting states of Queensland and NSW provided that significant boost to their economies in 2013-14 through ­direct and flow-on contributions. The economic research, compiled by Lawrence Consulting, also highlighted that the sector in those two states employed, ­directly and indirectly, 381,815...
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Iron ore junior spreads the blame

miner_zombie_hat-r99b8e8a99aec4d4b852c831728a4fc98_v9wfy_8byvr_324 From The Age: Former Rio Tinto executive Mal Randall said the iron ore spot pricing model has "been a disaster" and the major producers should consider returning to long-term benchmark contracts. ..."Iron ore pricing now is, to a large extent, in the hands of the traders who can wheel and deal," Mr Randall, who founded the Kerry Stokes-controlled Iron Ore Holdings before it was taken over by BC Iron, said. "Sometimes it bears no relation to the actual iron ore price, it's just deals and deals within deals. If they want to push the price up or down somewhere out of Qingdao they will and they'll...
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Daily iron ore price update (Hello peak steel)

January 2015 crude_update No prices today with CNY. But peak steel is here in hard numbers from the World Steel Association: World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 133 million tonnes (Mt) in January 2015, a -2.9% decrease compared to January 2014. China’s crude steel production for January 2015 was 65.5 Mt, a decrease of -4.7% compared to January 2014. Elsewhere in Asia, Japan produced 9.0 Mt of crude steel in January 2015, a decrease of -4.0% compared to January 2014. In the EU, Germany produced 3.7 Mt of crude steel in January 2015, an increase...
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The bull case for Fortescue Metals Group

123456 Apparently, there is one, from Morgan Stanley: Through cost out, FX and oil price Fortescue has stayed ahead of the declining iron ore price. Our positive stance relies on the iron ore price rising; FMG can survive at lower prices but the investment case is compromised. Contrarian OW retained, with attention firmly on the iron ore market. Where do we see breaking point now? At a US$63/t spot price (scenario pg 4) the US$46/t all-in cost we project, which includes tax, interest and dividends, leaves a US$1/t margin. This carries a ~US$3/t buffer on the spot freight price so a...
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The very hungry Caterpillar

travel-lonely-planet--gene2jpg-c55b50690021c7e7 From Zero Hedge, you still wouldn't want to be in mining services:   Caterpillar just reported that in January, it suffered its worst retail sales month since Lehman, with global sales plunging 14% from last January (when sales in turn had dropped 8% from a year before, while the year before had slid 3% from the year before that and so...
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Daily iron ore price update (Monorail!)

mono-rail No prices today with CNY. But Vale is out with a solid production report, from Bloomie: Vale SA, the largest iron-ore producer, reported a 2.1 percent increase in fourth-quarter production of the steel-making ingredient, capping a record year as large miners boost their share of an oversupplied global market. Output excluding a stake in the Samarco Mineracao SA venture rose to 83 million metric tons from 81.3 million tons a year earlier, the company said in a statement Thursday. About time! Production should continue to rise modestly until the tsunami building at Serra Sul S11D breaks in H2 next...
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Daily iron ore price update (FMG debt)

imgres-200x200-200x200 Benchmark spot fell slightly to $63.40. Not much to go on with China closed but here are a couple of links in peak steel in China from the FT and Reuters. Nothing new but true! And little material on FMG from The Australian: The team at Morningstar said it expected negligible free cash flow at the miner until the end of fiscal 2017 as margins suffer under the lower iron ore price and as Fortescue delivers $US1.2 billion ($1.5bn) worth of iron ore already paid for by customers. “The prepayments (for future tonnes) were a novel way to ­finance expansion but the cost is incurred during the...
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Mac Bank: Brace for “very ugly” iron ore prices

url From Smart Investor: “Some of the Chinese supply will go, but I think overall the Chinese will be pretty tough to displace,” Graeme Train, a commodities analyst with Macquarie in Shanghai, said. ...He is forecasting an average price of $US62 a tonne in the second half of this year, but said there was a risk the price went “way below that” for short periods as production levels were maintained. “It could get very ugly,” he said. Xu Xiangchun, the chief information officer at Mysteel, said the price could move as low as $US50 a tonne after the Spring Festival Holiday finishes next...
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There is no commodity “reflation trade”

china-bubble-balloon From Morgan Stanley: Crude's rebound has increased interest in playing the reflation trade. Copper miners (FCX and TCK) have been the main beneficiaries (up >20%). Aluminum equities fell on concerns about regional premiums, though inventory trend remains bullish. We updated our TCK and KGC models after 4Q results. Metals: LME aluminum inventory fell below 4.0 mmt, first timesince May 2009; zinc stocks fell below 600 kT, lowest since May 2010. At the YTD withdrawal rate of zinc inventory, LME stocks should decline to their 2007 lows within 8 months. Zinc priceaveraged ~$1.50/lb in 2007 vs. spot...
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Earth to miners, a strong USD will not save you

1 Some bad analysis today from The Australian: MINING companies, slammed by tumbling commodities prices, have in recent days vowed not to cut production, saying the stronger US dollar is cushioning the blow of falling markets. Miners ranging from Australia’s BHP Billiton and Rio Tinto to smaller firms like South Africa’s Lonmin are benefiting from the stronger greenback because they receive dollars for the gold, copper and iron ore they dig up, but pay for labour and many other costs using local currencies. When the dollar rallies, revenue generated by metals sales stretches further in covering...
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Citi, CLSA say “sell” Fortescue

Russell Crowe as Noah From Citi to FMG: Downgrade to Sell — Interim result was slightly ahead of consensus/Citi at EBITDA level, but NPAT was 16% below our estimate due to higher D&A & interest cost, partially offset by lower tax. An increase in D&A has downgraded our earnings estimate and we reduce our target price to A$2.20/share, previously A$2.40. With iron ore prices expected to fall to US$56/t in 2Q15, before bottoming at US$53/t in 3Q15, we downgrade our recommendation to Sell, previously Neutral. Iron ore bottoming in Q315? With Anglo, Sino, Roy Hill, RIO, BHP and Vale all still ramping up and China...
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How to save Fortescue Metals Group

34567890 Nev Power seems to have run out of ideas vis his firm's future  and as such is repeating himself rather pointlessly: Fortescue Metals boss Nev Power has warned that talk of flooding the iron ore market with new supply has drained “enormous” amounts of money from the Australian economy. ...Mr Power said the low price had drained so much money from the industry that future investment was now limited. “All companies have their ­options and own strategic decisions to make but the iron ore price going down has drained a lot of cash out of all of the industry, ­irrespective of what their...
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Daily iron ore price update (rejection!)

anvil-200x200-200x200 Here are the iron ore charts for February 17, 2015: That is an emphatic rejection of higher prices with spot and paper all down firmly. Benchmark was down 2.3% to $63.60. Rebar average has been flat for four days and appears to be on holiday already. Reuters has texture: ...an industry group warned weak infrastructure and real estate investment may continue to weigh on China's steel consumption, after slashing profits at mills last month. It was the biggest single-day jump for the benchmark price since it climbed nearly 5 percent on Dec. 30. The spike came after Australian miners sold...
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Iron ore miner rally flame out?

2 The major iron ore miners are up today, just barely, with FGM down 1% and more. To the indexes: The idiocy spreads have stopped expanding as cerebral cortex's dislocate from blood supplies: Death becomes the juniors: I'm wondering if the rally has reached flame out. The big spot spike yesterday was irrational, equities have rallied more than 20% since December lows, the Aussie isn't weakening for now, oil is well up and the major earnings reports are behind us (excepting BHP). Dalian is down 6 points today as well, perhaps in part owing to the disturbing if not alarming Chinese...
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