Iron ore price

Viewing posts in the Iron ore price category

Iron ore majors launch as gloom deepens

dsgw4 Don't look to equity markets for rationality. There ain't none. Not today anyway. The news flow for iron ore is dreadful with Vale's price, profit and inventory shocker and a downgradeto $70 today for the price outlook from Morningstar (though rather stupidly not until 2017, two years too late) and big equity price falls in London overnight to boot. There's not much help in Dalian, either. But stuff that, BHP and RIO are pouring it on, up 1% apiece and Fortescue is firm. Perhaps there's some global rotation out of Vale and into the locals, which makes no sense given Vale showed how screwed the...
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Daily iron ore price update (green)

anvil1-200x200111 Here are the iron ore charts for October 30, 2014: Positive price action for no apparent reason. Paper markets firmed with rebar futures up firmly and Dalian May up 2% plus. Spot and rebar average too. Some might take it as more evidence that $80 is the new equilibrium price. Texture from Reuters: Some steel mills in Hebei, China's top steel-producing province, have been asked to reduce or suspend production during an Asia-Pacific Economic Cooperation summit in November to help improve air quality in Beijing. Traders initially believed the capacity reduction would help thin supplies...
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Big miners tumble as Vale shocks

dgwr Hoocooanode? Vale was out with its third quarter earnings report yesterday and it shocked with a $US1.44 billion loss versus the $US1 billion plus expected. The culprit was a nearly $US3 billion loss on FX derivatives as the Brazilian real tanked. But it was also bad in iron ore with Vale's average sales price down to $US68 per tonne. It is also accumulating iron ore inventories like there's no tomorrow, up by 9.3 million tonnes, despite its record shipments in the quarter. The company intends to sell 'em soon said the CEO Luciano Siani. Shares fell 3.5% in New York. Reuters has...
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Why isn’t Oz in the mining transparency drive?

images Cross-posted from The Conversation. It’s a far-from-perfect instrument of global governance. But as theExtractive Industries Transparency Initiative (EITI) coalition celebrates its 12th birthday, it can point to steadily increasing membership and dialogue between countries, mining companies and NGOs. Regrettably, Australia, with one of the world’s largest mining economies, has still not committed to joining the 48 other nations working on EITI disclosure. This is despite the obvious benefits that greater transparency could deliver to all Australians as they confront deep-seated disputes about...
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Another iron ore junior swan dives into the tarmac

122a485 The iron ore equity market action today is mixed with the majors continuing to bleed lower but FMG still outperforming on sell side uppers. Here is the relative performance chart: The idiocy spreads are still getting wider: The junior mausoleum is mostly quiet but the BC Iron swan dive continues, down another 5% today and close to $1 after its flight of fancy at $5.50 earlier this year. I've expanded the chart to give a more operatic grasp of the quickening belly fop: That's really just a godawful head and shoulders annihilation! As I like to recall, it was some FOMC president...
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Atlas spreads the cheer

cheer-gif Anyone listening to this ought to run a mile, Ken Brinsden of Atlas Mining at the AGM, via AFR: “In some respects, we don’t see them [the majors] as our competition… for us to deliver iron ore to the ship for $20 a tonne, that would be ludicrous. But if we can do it for $45 a tonne, who isn’t to say that that might be incredibly competitive in a global context.” Well...me. In its most recent quarter, Atlas produced at C1 costs of $48 A $3 reduction would take its all-in breakeven to roughly $64 per tonne. However, it sells iron ore that is heavily discounted to benchmark (for instance it...
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Brazil mulls more iron ore as real tanks

Capture Here in action is the point I've been making about Fortescue and the Australian iron ore juniors battle for survival versus Brazil. From Platts: Mineracao Usiminas, the mining arm of Brazilian steelmaker Usiminas, hopes for "lucrative exports" of iron ore in the fourth quarter, after a third quarter without exports, the company said Wednesday. "There will be an opportunity for profitable exports," Wilfred Bruijn, executive director, said during a conference call with investors. That possibility is mainly due to the recent devaluation of Brazilian real compared to the US dollar, the company has...
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Daily iron ore price update (off the Cliffs)

anvil Here are the iron ore charts for October 29, 2014: Paper markets were better with the 12 month swap and Dalian at least stable. Dalian May also added 2 points. Rebar futures jumped. But that did not translate to physical buying in either steel or iron ore. I still favour new five years lows in the near future. Platts describes some ongoing tightness around premium lump: Spot prices of seaborne iron ore lump rose to the highest in seven months, driven by a scramble for material arriving in November. Mills continued to buy lump anticipating the need to reduce sintering during the winter...
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Iron ore miners fly on thin air!

cfghe The sell side's misplaced excitement over FMG volume growth and cost reductions I canvassed this morning appears to have lit up the big miners today despite the iron ore price falling. Credit Suisse was joined by Charlie Aitken reiterating his buy call and FMG is up 3%, as well as the big boys nearly 2% (they were up 1% overnight on the LSE). Here's the relative performance chart: The idiocy spreads are stalled:   The juniors can't catch the updraft as their cadavers sink ever deeper into a bottomless ocean of cheap dirt: Dalian futures are up 4 points today. If I were a...
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Daily iron ore price update (sink)

anvil Here are the iron ore charts for October 28, 2014:      More price weakness. The 12 month swap continues to explore new lows while Dalian January hovers at its nadir and May fell back to 522 yuan or $67. Rebar futures were stable. In physical, spot is tracking futures lower even as rebar remains firm. Port stocks fell 850k tonnes last week to 107 million tonnes in a marginal positive but at the current rate of decline will take three to four months to put a real dent in the pile and if that destocking were to take prices down 1% per week then, well, you get the picture! In steel,...
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Iron ore juniors smashed as futures fall

dy5e Yes, it's  walk among the tombstones time again. The major miners are all off materially today with RIO firmly below $59 and BHP racing it south in the low $33s. FMG is outdoing them both as usual, down several percent to a low of $3.28 and only 2 cents above its 2014 closing low. Here is the relative performance chart: The idiocy spreads are poised to resume contraction on the spreading weakness: The real action is in the juniors. AGO was downgraded by Moody's this morning and the BCI warning of lower shipments has both down 10% today: The remainder of the little zombies are...
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Chinese iron ore import tax?

man-lifting-word-tax-resized-600 From The Australian: Deutsche Bank says its feedback from the 2014 Asia Steel Forum on China’s iron demand outlook was “pessimistic”. “A weakening property market and restructuring of the economy are having the effect of significantly lowering steel demand,” the broker says. “A weakening property market could create structural headwinds for shippers of dry bulk.” ...The broker also saw potential for China to impose an import tax on iron ore. It's not news that sentiment is poor. The risk of the Chinese imposing an import tax on iron ore must surely keep the majors up at...
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Daily iron ore price update (paper cut)

anvil Here are the iron ore charts for October 27, 2014: Paper markets are shot. The 12 month swap is in free fall. Dalian six month futures are pricing several dollars lower still. Dalian May is still pricing $67. Rebar futures bucked the trend and managed a little bounce supporting physical rebar. Iron ore spot appears destined to go to new lows with a nice little head shoulders top on its recent rebound. Reuters has texture: "It's been difficult to conclude some deals because of the recent volatility in the market," said a Shanghai-based iron ore trader..."If the market goes up too quickly you...
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Iron ore miners fade with futures

dthj6 The iron ore miners are on the nose today with BHP holding ground but RIO down the better part of 1% and below $60 again. FMG is getting a caning for some reason (the AFR weekend ambush?) down almost 3% and below $3.40. Here are the relative performance charts: The idiot spreads are again turning towards closures: The juniors are still stuck with one foot in the grave and the other on a banana skin:   Dalian six month futures are down a modest 2...
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Daily iron ore price update

anvil Here are the iron ore price charts for October 24, 2014:    Slightly improved price action with stability in paper markets, including rebar futures. Even the disastrous Dalian May contract which is pricing $67 managed a 4 yuan rise.  Offsetting that, physical couldn't catch a bid with both iron ore spot and rebar average relatively weak. One interpretation f things is that we'll see the Hebei head fake continue to unwind this week. A little news today from India where Goan mining leases are to be renewed. But that really only offsets last week's news of rising...
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AFR does a number on Nev Power

Capture It's strangely truncated, has a cast of junior journalists and random commentators and the quoted numbers are mostly wrong but in its iron ore do up on the weekend the AFR managed to convey that Fortescue's Nev Power is a hypocrite for his recent attack on the expansions of the iron ore majors: Very thin but probably overdue given the dream run given to FMG by Jennifer Hewitt this year. Over at ANZ's own media outlet, Blue Notes, Mark Pervan explains why he's been so wrong on iron ore prices this year, including no let up on FMG: Meanwhile, CFO Stephen Pearce is in damage control at...
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Iron ore miners fall as futures hold

hjki It's a decent day today for the big miners with BHP only down a little and RIO a bit more. FMG is on the nose again down 2%+. Here is the relative performance chart: The idiocy spreads are stable: The juniors are still supping the hemlock:   Dalian six month futures are...
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Goldman on iron ore in 2015/16

zdfa From Goldies: What next? Two scenarios for 2015-16 We expect Chinese steel production to grow by 2% and believe that further upside from stimulus spending is highly unlikely given the shift away from investment-led growth that is unfolding across the economy. The market needs to absorb a c.110Mt surplus in 2015, roughly double the c.60Mt surplus it absorbed this year via mine closures and restocking at Chinese ports. Our price forecast assumes that mine closures continue in China as the price differential with imported ore narrows and domestic producers are fully exposed to US$80/t seaborne...
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China steel mill sentiment edges above disastrous

sgw A few charts below from Mac Bank's monthly Chinese steel mills survey: The October results of our proprietary steel survey show a modest improvement in conditions after September’s sharp contraction. Steel traders report improving sales and falling inventory, mill orders are contracting less quickly and profitability appears to stabilising at much better levels than previous troughs. For raw materials, purchasing plans still seem muted and stock overhangs are still pressuring prices. No plans to restock: And no evidence of any turn in property orders but exports are...
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Daily iron ore price update ($67 in May)

anvil Here are the iron ore charts for October 23, 2014: That's some poor price action. Paper is tanking again, including rebar futures. 12 month swap hit a new post-GFC low. Dalian is rolling. It's May contract was crushed and is now pricing 521 yuan or $67 equivalent. Reuters has texture: Amid slowing economic growth in China, demand for steel is unlikely to see "any obvious improvements", the China Iron and Steel Association (CISA) said in a report published on its website on Wednesday. "And with steel production remaining at a high level, oversupply will worsen, steel prices are unlikely to...
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Big four miners flood Fortescue

Capture Yes, it's all iron ore go at the big miners. Anglo-American has joined the party. From Bloomie: Anglo raised its full-year iron-ore production forecast to a range of 45 million tons to 46 million tons from 44 million tons to 46 million tons, after third-quarter output jumped 37 percent from a year earlier, the London-based company said in a statement today. It plans to start shipping iron ore from the $8.8 billion Minas Rio project by the end of this year. ...“Work on the Minas Rio project continues, with significant progress made to deliver first ore on ship,” Anglo said. “Commissioning and...
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Iron ore miners fall sharply with futures

dfgsws The big miners are all down today, almost 2% for RIO and BHP and 3% for FMG. There was a brief flurry around the insipid China PMI suggesting that traders are as bored as I am but that's selling into the afternoon. To the relative performance charts: With the recent price rebound, the idiocy spreads have shed a few extra IQ points and are now trading at the level of a gap-toothed moonshiner. At least the moron cross has receded: The death's head is still shadowing the prices of the juniors. Even poor Atlas can't find a bid with its heroic cost cutting efforts: In China, Dalian...
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How much iron ore production has shut?

fgwe From Morgan Stanley: What’s required for a rebalance? Assuming no  operations close and producers deliver what has been  guided, we estimate the global seaborne iron ore market  (including domestic Chinese production) would be in a  71Mt surplus in 2014. By next year, the surplus will rise  another 86Mt. These figures are the magnitude required  of material to exit the market to achieve price stability. Industry consultant, Wood Mackenzie,  estimates 52Mt of Chinese domestic iron ore capacity  has so far been permanently removed as a result of low prices. So far, the group claims, all...
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Atlas slams into iron ore price deck

ATLAS-IRON-LOGO---FINAL Atlas Iron has released its Q3 production update and it's an admirable effort: All-in cash costs* A$68.90/wmt CFR for the September 2014 Quarter, down from $75/wmt in the June 14 Quarter > C1 cash costs $48.10/wmt (wet basis, FOB and excluding royalties) for the September 2014 Quarter, down from A$51/wmt in the June 2014 Quarter > Average headline price of US$69.62/dmt CFR received for Standard Fines over the September 2014 Quarter, after adjusting for US$5.24/dmt of negative provisional pricing adjustments > Competitive product discount of circa 10% achieved, resulting in average...
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Daily iron ore price update

dfbw Her are the iron ore charts for October 22, 2014: Singapore was closed so no iron ore prices. The rebar average rally powered on but futures fell sharply again. Sensible enough given it's the Hebei effect described yesterday. That's it...
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