A little knowledge is a dangerous thing. From The Australian: BHP Billiton’s unspecified deferral of a small Port Hedland expansion helped accelerate buying from steel mills getting back into the iron ore market…The run has been helped by Rio this week saying it shipped 10 million tonnes less iron ore in the March quarter…Both blamed
From the AFR: To get the latest deal away it not only had to offer a significantly higher coupon on the bonds it was forced to secure the debt against the company’s assets. That rang warning bells at the credit ratings agency Standard & Poor’s which lowered its credit rating on FMG’s senior secured debt.
Here are the charts for April 23, 2015: Spot climbed again with Tianjin benchmark up 1.7% to $53.80. The Dalian six month futures short squeeze continues unabated with overnight markets up another 2.5% to 414. However, the Singapore 12 month swap has already sobered up. Rebar is still melting. We’re still chopping wood as steel mills
From the AFR: Treasurer Joe Hockey, whose budget hopes are being smashed by falling iron ore prices, has backed a decision by Australia’s biggest miner to curb production of the key export. Mr Hockey said “common sense must prevail,” while he was also pleased to see exporters were “taking a more reasonable approach to production levels”.
From Morgan Stanley: MIIT targets to reduce 80mnt steel capacity and to limit steel companies to within 300 in the next three years: MIIT targets to reduce 80mnt steel capacity within three years and to limit the number of steel companies to within 300 from the current 500 during the same period. By 2025 the top 10 steel mills’
From The Australian: The initial $1.5 billion senior secured notes offer from Fortescue Metals has ballooned to $US2.3 billion due to a high level of demand. Chief executive Nev poer said US capital markets have shown great support for Fortescue. “We’ve seen strong demand from the market which will result in repayment of our 2017 and
The AFR back page gives Colin Barnett a lift today with a poorly reasoned rationale for Colin’s cartel: Canada started operating the Canadian Potash Exporters cartel marketing firm 43 years ago to manage the world price of potash, the mineral used in fertiliser. …BHP and Rio have rejected Barnett’s criticism of their corporate strategies to maximise
Standard and Poors has cut FMG debt deeper into junk: MELBOURNE (Standard & Poor’s) April 22, 2015–Standard & Poor’s Ratings Services said today that it had lowered its corporate credit rating on Fortescue Metals Group Ltd. to ‘BB’ from ‘BB+’. The outlook is negative. At the same time, we lowered the ratings on the company’s
From Morgan Stanley: Iron ore has seasonally weak 1Q: The 1Q report shows Iron ore sales of 73Mt annualising 17% below guidance, while Pilbara production of 71Mt was 14% below. The Pilbara production rate needs to average 345Mtpa for the next three quarters and group sales need to average 370Mtpa vs a 360Mtpa name plate. It was a particulary
Here are the iron ore charts for April 21, 2015: Spot fell and so did paper though Dalian rallied back to 389 overnight. Texture from Reuters: “Mills are trying to limit their raw material stocks to as low as possible. This way they can keep their cost at current market level and guarantee their small profit from
From the AFR: Embattled iron ore junior Atlas Iron will extend its suspension from trading on Tuesday but is likely to be in receivership by the end of the month, industry sources told Street Talk. …Sources said the majority of the company’s debt-holders were in favour of it entering receivership, an outcome which is likely to be
RIO has released its Q3 production update and disappointed on volume: Pilbara operations First quarter production of 71.1 million tonnes (Rio Tinto share 57.3 million tonnes) was 12 per cent higher than the same period in 2014 following commissioning of the Nammuldi wet plant and the ramp up of Hope Downs 4. First quarter production
From Reuters: Chinese steel company Shandong Iron and Steel Group said it had acquired the remaining 75 per cent stake in the Tonkolili iron ore mine in Sierra Leone from the mining company African Minerals for over $170 million. Shandong now has 100 per cent of equity in Tonkolili, and will also own the associated
Here are the iron ore charts for April 21, 2015: Spot firmed with Tianjin benchmark up 10 cents to $50.80. But paper weakened with Dalian down yesterday and even further over night, currently trading at 381. 12 month swaps rolled and Rebar average also broke lower. Reuters has texture: The 100 basis point reduction in
From BNP: Iron ore has replaced oil as the worst performing major commodity price in recent weeks as it is caught in a perfect storm of increasing global supply and stalling Chinese demand. Iron ore prices are likely to keep falling given that industrial restructuring has barely begun in China and that global iron ore supply