Daily iron ore price update (restocking blues)

Winter restocking in China has disrupted steel prices across the iron ore complex with rebar futures down more than 3% during Tuesday’s session before slightly recovering, as coking coal also dropped. This hasn’t effected the spot iron ore price, or indeed Dalian futures which are treading water:

The fallout from the WA government’s cash grab on shippers in Port Hedland heated up again yesterday. Via the AFR:

The fees come as WA Premier Mark McGowan boasts of a strong financial position, which has been underpinned by soaring royalties from iron ore. The state expects to earn more than $8 billion in iron royalties in 2020-21.

They were told the fee would be used to pay for the state’s “Port Hedland Voluntary Buy-Back Scheme” (PHVBS), which was announced in June following a 2016 government report that concluded fewer people should live next to the port to reduce the health risks of being exposed to iron ore dust.

Under the scheme, the government plans to buy homes near the port in the town. located about 1300 kilometres north of Perth, and help pay for residents to move.

Shippers have been told that the new fee will be temporary and will be removed when the government finishes paying for costs associated with the relocations.

Melwyn Noronha, CEO of Shipping Australia, which represents national and international shipping lines, said it was “outrageous” that shippers were being forced to pay for the scheme given that WA earned billions of dollars in iron ore royalties.

Mr Noronha said dust from iron ore did not originate from ships, and that iron ore was “wet-loaded” into a ship’s hold.

“Iron ore dust is blown off iron ore stocks from the land-side transport and storage of iron ore,” he said. “As this charge has its origins in land-side dust pollution it should therefore be imposed on the land-side operators.” Ships entering Port Hedland already pay between $70,000 and $100,000 per vessel in other fees and charges, according to the industry group.

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    • Brazil and West Africa. And Australia lol.
      There is no secret China will do anything they can to rid themselves from the dependency on Oz IO. The question is what steps is Australia taking to be less depended on Chinese exports? Looks like we have 5-8 years to diversify.
      Or, are we going to do what we always do – she’ll be right mate.. something else will come up.

      • This may offend quite a lot of people but the ‘Gunnamatta plan’ – to head off Australian economic malaise, do something substantial to underpin economic future and to do something about addressing global warming – would probably be something long the lines of…..

        1. Rid the Murray Darling basin of stupid water using industry. (starting with cotton)
        2. Build some major salt water desal plants up in QLD to feed water into the Darling (and then down the Murray) and transform the agricultural productivity (not just grains, but intensive animal raising, vegetables and fruits) of the Murray Darling. Maybe also build some dams in QLD and canals and re route existing rivers etc.
        3. Send a train line North from Mildura to Broken Hill/Wilcannia and then across to (near) Brisbane, with another from Mildura to Adelaide and to Hay, and maybe also one North from Deniliquin via Hay, across NSW and in somewhere like Tamworth – so you effectively get two big arcs around Sydney plugging Melbourne Adelaide and Brisbane in.
        4. Offer incentives for business, government departments, energy generators etc to move to Boondocks NSW (Northern Vic, Riverland SA, Western QLD).
        5 Offer incentives for epic scale energy generation (maybe even considering nuclear) in boondocks NSW (Northern Vic, Riverland SA, Western QLD)
        6. Shunt an existing University to somewhere like Broken Hill and turn it into a ‘University of Green Technology’.
        7. Significantly expand agricultural production (I am a believer that much of the world faces an agricultural production issue, including parts of SE Asia, China, and India) and encourage agricultural processing in boondocks NSW (Northern Vic, Riverland SA, Western QLD)
        8. Build international airport(s) in Mildura, Broken Hill and Northern NSW (close to QLD)
        8. Reforest parts of boondocks NSW (Northern Vic, Riverland SA, Western QLD) – quite literally, geo engineering.
        9. Maybe create a large scale aged car sector for global demand (user pays of course) centred on riverside locations in boondocks NSW (Northern Vic, Riverland SA, Western QLD)
        10. Plug Eastern Australia energy generation into SE Asia (maybe cable to Indonesia/Singapore).
        11. Maybe look at running train line from Broken Hill to Alice Springs or Darwin (or somewhere on outer arc plugging into Adelaide Darwin line, so as to plug Darwin shipping/people moving capacity)
        12 Maybe looking at (if water can be generated) permanently filling Lake Eyre.

        Of course that would all be predicated on MMT like issuance of government debt, and funding of projects, combined with harvesting taxation of economic development (rather than population ponzi) which would be measured and data backed.

        A fella can have some weird dreams

        • I like all of it. Food will be very important resource in coming decades until we accept infinite population growth is not sustainable.
          Point 2 will need proper study to be taken on impact to environment by diverting water from Qld and building dams.

          • completely agree with the environmental impact need. But I also think we are going to need to ‘impact the environment’ – I want the study to map and measure what it is we are going to ‘lose’ of the current environment, and what we will ‘gain’ and when.

            I would also be inclined to make sure some of the finest internet access on the planet was available anywhere in boondocks NSW (Northern Vic, Riverland SA, Western QLD) so that anyone in the world capable of ‘working remotely’ would feel it a viable place to go and enjoy life, and that quality of life across the whole region was as good as if not better than anywhere else in the world/Australia, and that it was considered a very safe and very pleasant place to live.