Find below the iron ore price table for October 11, 2013:
In news today, Reuters offers a snapshot of market internals:
“Most of the buyers are looking for prompt cargo and we are seeing a lot of people inquiring,” said a trader in Shanghai who sells Indian iron ore. “We might continue to see this for another week to 10 days.”
Mills are replenishing inventories as Chinese markets reopened on Tuesday after a week-long National Day break. Australian spot cargoes from miners BHP Billiton and Rio Tinto sold via tenders and physical platforms were snapped up this week as producers ramp up output.
But some caution is still in the air, and not all mills are buying iron ore aggressively given modest movements in steel prices.
“While some traders reported better interest, mills said they would hold off in anticipation of lower prices later this month,” according to Steel Index. Shanghai steel futures edged up on Friday, but are only up less than half a percent for the week.
Baoshan Iron and Steel, China’s biggest listed steelmaker, kept its prices for November unchanged.
“I think it shows that Baosteel is not confident about the market since demand is more sluggish than what it had expected and it does not have clear visibility for a meaningful rebound.”
From India’s The National comes a useful backgrounder on the progress for freeing up Goan exports:
Prasanna Acharya, the director of the state government’s mines and geology department in Goa, talks about the ban on the iron ore mining industry.
What kind of impact has the mining ban had?
It’s a cascading effect. Disposable income has gone down. Car sales have gone down. Hotels are empty – people used to come and stay in these hotels for trading activity. Real estate has gone down. People are trying to sell off what they have bought. The big, luxurious cars are being sold.
What is likely to be done to regulate Goa’s mining industry in the future?
What we are trying to do is monitor everything electronically by GPS systems from the dispatch to the destination. All loopholes will be closed. There were some irregularities related to unregulated activity. The exports were unregulated to a large extent. That led to chaos, and there was no proper accounting. Mining is one issue. Trading is another. There were about 461 traders. Under the new draft rules, we are cancelling each and every trader and just allowing lease holders to operate. We’ll not allow movement of ore by a third person other than a leaseholder. The lease owner will be responsible for the ore, so there will not be a chance for manipulation
Even if the Supreme Court case is settled, aren’t there still restrictions in place from the state government and the ministry of environment and forests that would prevent work from restarting?
We have relaxed this in certain cases, which we have cleared. About 28 such cases have been cleared by us. The ministry of environment and forests has also suspended some, and they will have to take a call on that. They will definitely have to pass those environmental clearances, but the process has commenced.
This has been such a boon for Australia. Without it, the iron ore price would have been $20 lower all year (according to Mac Bank and I agree). Australian income would have been a significant step lower. FMG would have already have struggled to survive and Roy Hill would be a memory, not to mention many other little aspirants.
Instead, it is building like there is no tomorrow without even finance in place. From the SMH:
Hundreds of dwellings and other buildings are already in place at the mine site village, which is serviced by Boeing 737 aircraft multiple times each week.
Earthworks for an ore processing unit are under way, and the project’s footprint is not limited to the 34-kilometre patch of the Pilbara that will be mined for iron ore.
Roy Hill is a port and rail construction project too, meaning works in its name are under way 344 kilometres away in Port Hedland and almost 1300 kilometres away in Perth, where the project will be controlled remotely.
The remaining 10 weeks before Christmas loom as a particularly busy period for the project, which is a joint venture between Mrs Rinehart’s Hancock Prospecting, Korean steel giant Posco, Japan’s Marubeni and China Steel Corporation.
The joint venture will move into its new high-tech home near Perth International Airport in November, from where the mine, port and rail connections will be controlled.
About 4500 workers’ rooms will be ready by November, and most significantly, the company hopes to have its debt finance sufficiently settled before the end of the year to officially declare the project under way.
”From now to Christmas there will be a lot of development occurring; we will have to increase the number of flights,” said project communications officer Darryl Hockey. ”Our lead contractor Samsung C&T has awarded all of its main contracts already, and mobilisation will soon follow.”
Those contracts are collectively worth close to $3 billion, and mean that hard infrastructure such as railway line and bridges are now under development.
That’s a lot of money to spend on a project that is not yet certain to go ahead, even for an industry where companies have shown a willingness to walk away from projects that have already swallowed up more than a billion dollars in preparatory spending.
As banks a export credit agencies jostle over $7 billion in uncommitted debt financing this preliminary spend says to me that the project is going ahead come hell of high water. This is not some giant corporation that can pull projects without a second thought. This is Gina Rinehart and her reputation at stake. If personal guarantees haven’t already been made behind the scenes I’d be surprised.
…several of the most senior officials in the Australian iron ore industry, who have privately told BusinessDay they believe it is now physically impossible for Roy Hill to achieve its goal of exporting first iron ore in the latter half of 2015.
In the iron ore industry, delays mean the loss of a lot of money, amplified by the climate of gradually sliding prices.
Back at the Roy Hill bunker, Mr Hockey shrugs off the doubters and the rivals, noting that a firm mine-plan for the project is in place, and still achievable.
”September 2015 is certainly not an aspiration, it’s a solid target,” he said.
Pass the popcorn.
