Daily iron ore price update (Brucutu)

Iron ore prices for March 20, 2019:

Spot hammered. Paper worse. Steel fine. Chinese iron ore port stock lifted to 148.2mt last week.

Bloomie has more on Brucutu:

Bradesco BBI, Thiago Lofiego

  • Positive development for Vale.
  • However, it’s still uncertain if the company can regain the provisional operating license under which it operated the Laranjeiras dam or if it will have to restart a licensing process with the Minas Gerais state environmental agency in order to be allowed to operate it.
    • In this case, Brucutu mine would be unlikely to restart in 2019.
  • Bradesco BBI sees Vale’s 2019 iron ore shipments totaling 350 million tons.
    • Faster-than-expected resumption of Brucutu could bring upside to the estimate.
  • Outperform recommendation maintained.

Goldman Sachs, Thiago Ojea

  • Brucutu restart should be quick once its license is returned.
  • Vale’s production is expected to reach 370 million tons in 2019.
  • Goldman’s global commodities team sees iron ore prices averaging $73/t in 2019.
  • Neutral recommendation maintained.

Goldman looks about right to me so price falls ahead for much of the year barring some new Vale shocker.

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