Daily iron ore price update (Samarco restart)

See the latest Australian dollar analysis here:

Australian dollar badly lags commodities rocketship

The iron ore complex had a wobbly start to the trading week as futures dropped alongside spot prices on Monday, as stockpiles increased for a second consecutive week on easing seasonal demand. Rebar futures dropped the most, down nearly 4% while spot iron ore still remains above $170USD per ton:

Meanwhile the Samarco mine will add to the seaborne supply this week after restarting operations in December, some five years after the collapse of a dam lead to 19 people killed, according to Mining.com

According to the company, approximately 75,000 tonnes of iron ore pellets will be shipped from Brazil to Europe. The company resumed its operations on December 23, with 26% of its total production capacity, which represents the production of about 7-8 million tonnes of iron ore per year.

The dam, owned by Samarco – controlled by Vale and BHP – burst, releasing 39.2 million cubic meters of tailings waste in the Rio Doce Basin, killing 19 people. It was considered Brazil’s worst environmental disaster.

The company estimates that in 2029 it should reach a production scale between 22 million and 24 million tonnes of iron ore per year, the same level as before the tragedy.


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      • “Spot first, then AUD..” – that’s what I meant. IO price needs to move first but with Samarco starting to kick I can see spot moving lower sooner rather than later.

        • MathenomicMEMBER

          You think the initial Samarco volumes are enough to cause a direction change in ore price? My thoughts were it would only serve to steady price or slow appreciation on delta until the orchestra of Chinese demand metrics reduce.

          Either way I’m looking at purchasing some NYSE:CROC if we hit 79c

          • MathenomicMEMBER

            YANK is the ASX equivalent yeah; I always think about CROC though because it’s been around since 2012 (YANK’s only been around 3 or 4) and US ETF transaction fees were still cheaper for me until recently. The leverage and ICR are different and from memory they’re both long the same currency pair futures so with CROC you then have a premium when you liquidate assuming your portfolio’s currency base is AUD. I should probably model the differences over various holding periods.

          • Samarco does not have enough capacity in its own right but China is moving away from building empty cities and will be investing more into services and clean tech.
            Add to that the geopolitical games that mandate, any reduction in IO demand from China will come at the expense of our IO miners not Brazilian. This is where AUD will come under pressure.
            Also, there is too much steel capacity and EU will not sign any trade deal without China agreeing to stop dumping steel. For that to stop China will have to cut production. China is fine with this as they need to shut down few old and polluting mills. Killing 3 birds with one shot:
            1. Get EU trade deal.
            2. Reduce pollution.
            3. Get international recognition for taking steps to reduce pollution.

            my view for now.. 🤔