Find below the iron ore price table for October 10,2013:
So, firming up again. The chart:
Reuters sums up the market for us nicely:
The price of iron ore, China’s top import commodity by volume, has held steady since the Chinese returned from the Golden Week holiday on Tuesday, with buyers not pressed to chase costly cargoes.
“Mills are restocking cautiously. Prices for downstream steel products are still under pressure although sentiment is a bit better,” said a Shanghai-based iron ore trader.
There were also plenty of cargoes on offer in the spot market, limiting price gains, traders said.
In other news, Rio is talking up Pilbara 360 still. From the AFR, Andrew Harding head of iron ore:
“If I am required to build the business to a certain size because it maximises value, I will do that if it’s sensible and if there’s another way that maximises and increases value I will do that, but I am not in love with any of it,” he said.“You have to maintain an ego that does not need to be satisfied in building things. I’m a mining engineer, I am not a romantic truck lover or process plant person or anything like that”.
One wonders if this isn’t a little swipe at Gina’s Roy Hill, which might be interpreted as a vanity project in the emerging context. Anyway, the article continues:
“I think the 360 million tonnes ramp-up makes sense,” said Andrew Corbett, Perpetual’s resources analyst. “It is a good economic return on quality assets. If demand falls away then 360 could have a significant influence on the iron ore price. If you get a realistic and sustainable growth demand profile then 360 is needed.”
I agree and as I have argued before any short term loss in price is restored by keeping longer term pricing power. Harding seems to agree:
“It would be a fallacy to assume that we can produce all these tonnes and nothing changes in the market. We understand the dynamic impact of what we do,” he said. “At the end of the day we are at the bottom of the cost curve so us producing more tonnes economically makes sense.”
“We are not in a race to beat anyone. If you had a business around that you are not in control of your own future because other people are in control of your future,” he said. “In why we are building 360 – it is because it is incredibly sensible to duplicate the stuff that is essentially the same to do 360 and you get inherent cost savings.”
I reckon it will go ahead, perhaps in a staged way. Come hell or high water, Gina’s is going ahead too.
