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iron ore news

Oversupply continues to weigh on the price of iron ore, which has slipped to a 21-month low following a record 1.2 million-tonne single-day shipment of the bulk metal out of Port Hedland last Saturday.

The benchmark iron ore price, measured out of the Tiajin port in China, has been trending down all week and slumped a further 2.1 per cent overnight on Thursday, to $US91.50 a tonne, the lowest level since September 2012.

Iron ore is down 3.2 per cent this week, and 31.8 per cent this year.

Last Saturday, Port Hedland shipped 1.27 million tonnes of iron ore in a single day, using seven capsize vessels, for the first time, to beat the previous, record set in April, by close to 160,000 tonnes.

The big miners are unfazed by the price crash, as they maintain low costs and higher quality grades of iron ore. BHP Billiton's breakeven sits at $US45 a tonne, while Rio Tinto's is $US43 a tonne. Vale's is a little higher at $US75 a tonne because it has to ship further from Brazil to China.

BHP, Rio, and Vale are all chasing record volumes of 217 million tonnes, 295 million tonnes and 360 million tonnes respectively.

"Right now, they wouldn't be thinking about managing their production into the market," UBS mining analyst Glyn Lawcock said. "We would estimate, BHP and Rio are still making in the order of $US35-$US40 per tonne margins."

In Australia, the value of iron ore exports has risen 24 per cent over the past year, even though the iron ore spot price has lost more than 30 per cent.

Single-metal miners such as Fortescue Metals and Atlas Iron face the difficult challenges of a higher cost base and lower quality iron ore, which is sold at a discount to the benchmark price. Fortescue has an all-in cash cost of around $US72 a tonne, while Atlas breaks even at about $US82 a tonne.

The grade and impurity discount between the benchmark 62 per cent iron ore Fe and grades sub-60 per cent has widened over 2014.

"Right now, we would understand if you're selling some spot tonnes of low quality product, you're taking the 6 per cent discount, plus potentially anywhere upwards of 15 per cent for impurity discounts," Mr Lawcock said.

The 15 per cent impurity discount has ballooned from as tight as 2 per cent in the December quarter last year.

"Fortescue is potentially now only making low double digit margins, $US10-$US12," Mr Lawcock said.

"Back three months ago, when discounts were narrower and prices were higher, those margins were probably close to $US30-$US40. It came in very quick, predicated by the fact that the discount went up and the price came down, so there was a double whammy."

As the Chinese government implements environmental policies curb inefficient and high-polluting steel producers, demand for lower grade iron ore wanes. The oversupplied market allows iron ore buyers the discretion to pass over product.

For every 1 per cent movement in the grade discount, Fortescue's pre-tax earnings fall by $100 million, according to Goldman Sachs.

Lower grade iron ore, 57 per cent to 58 per cent Fe, experienced a discount of $US10 a tonne over 2012 and 2013, but Credit Suisse estimates that was abnormally low. The discount is now $US19 a tonne and is expected to hit $US20 a tonne.

"The falling iron ore price has had the effect of reducing China's domestic production, as Australian producers hoped," Credit Suisse analyst Matthew Hope said.

"But also reduced demand for 56 per cent to 58 per cent Fe ore because the high-grade concentrate is needed for blending with lower grade ores to produce the right sinter quality."

Read more: http://www.smh.com.au/business/markets/iron-ore-hits-a-21month-low-20140613-3a0yd.html#ixzz34pOm4bbn

kuantan iron ore mining process trading and export

China's May iron ore imports fall 7 pct from April
    * Iron ore supply still outpacing demand - trader

    By Manolo Serapio Jr
    SINGAPORE, June 9 (Reuters) - Iron ore futures in China
steadied on Monday as the market stabilised after recent steep
falls in prices spurred buying interest in the world's top
consumer of the steelmaking commodity.
    Spot iron ore prices rose last week after a seven-week slide
that pulled down the raw material to its weakest since September
2012. A glut in supply could limit any further price recovery at
a modest level, traders said.
    Iron ore contract for delivery in September on the Dalian
Commodity Exchange was unchanged at 688 yuan ($110) a
tonne by midday. The contract rose about 0.5 percent last week
after falling in the prior five weeks.      
    "Supply is still more than demand, but we have probably seen
the peak in supply for now and that's helping stabilise the
market a bit," said a Shanghai-based iron ore trader.
    Despite a 13 percent drop in iron ore prices in May, China's
imports of the raw material fell to 77.4 million tonnes in May
from 83.4 million tonnes in April which was the second highest
monthly volume. 
    Imports may continue to decline on a month on month basis
due to high inventory of iron ore at Chinese ports and among
mills, a crackdown on iron ore financing in China and as mills
run down stockpiles ahead of the slow summer season, said Helen
Lau, a senior mining analyst at UOB-Kay Hian Securities in Hong
Kong.
    "This will put more downward pressure on the over supplied
seaborne market. We stay bearish on iron ore and steel prices,"
Lau said in a note on Monday.
    Stocks of imported iron ore at 44 Chinese ports stood at
113.2 million tonnes as of June 6 SH-TOT-IRONINV, down
slightly from a record high of 113.6 million tonnes in the
previous week, according to industry consultancy Steelhome. 
    Chinese steel mills are cutting back on long-term iron ore
contracts in favour of cheaper spot cargoes on expectations that
spot prices are unlikely to rebound strongly anytime soon.
 
    Benchmark ore with 62 percent iron content for immediate
delivery to China .IO62-CNI=SI rose 0.2 percent to $94.50 a
tonne on Friday, according to data compiler Steel Index.
    Iron ore ended the week nearly 3 percent higher in its first
weekly gain in eight weeks, but has stayed below $100 a tonne
since May 19. It touched a 20-month low of $91.80 on May 30.
    

kuantan iron ore mining process trading and export

China's May iron ore imports fall 7 pct from April
    * Iron ore supply still outpacing demand - trader

    By Manolo Serapio Jr
    SINGAPORE, June 9 (Reuters) - Iron ore futures in China
steadied on Monday as the market stabilised after recent steep
falls in prices spurred buying interest in the world's top
consumer of the steelmaking commodity.
    Spot iron ore prices rose last week after a seven-week slide
that pulled down the raw material to its weakest since September
2012. A glut in supply could limit any further price recovery at
a modest level, traders said.
    Iron ore contract for delivery in September on the Dalian
Commodity Exchange was unchanged at 688 yuan ($110) a
tonne by midday. The contract rose about 0.5 percent last week
after falling in the prior five weeks.      
    "Supply is still more than demand, but we have probably seen
the peak in supply for now and that's helping stabilise the
market a bit," said a Shanghai-based iron ore trader.
    Despite a 13 percent drop in iron ore prices in May, China's
imports of the raw material fell to 77.4 million tonnes in May
from 83.4 million tonnes in April which was the second highest
monthly volume. 
    Imports may continue to decline on a month on month basis
due to high inventory of iron ore at Chinese ports and among
mills, a crackdown on iron ore financing in China and as mills
run down stockpiles ahead of the slow summer season, said Helen
Lau, a senior mining analyst at UOB-Kay Hian Securities in Hong
Kong.
    "This will put more downward pressure on the over supplied
seaborne market. We stay bearish on iron ore and steel prices,"
Lau said in a note on Monday.
    Stocks of imported iron ore at 44 Chinese ports stood at
113.2 million tonnes as of June 6 SH-TOT-IRONINV, down
slightly from a record high of 113.6 million tonnes in the
previous week, according to industry consultancy Steelhome. 
    Chinese steel mills are cutting back on long-term iron ore
contracts in favour of cheaper spot cargoes on expectations that
spot prices are unlikely to rebound strongly anytime soon.
 
    Benchmark ore with 62 percent iron content for immediate
delivery to China .IO62-CNI=SI rose 0.2 percent to $94.50 a
tonne on Friday, according to data compiler Steel Index.
    Iron ore ended the week nearly 3 percent higher in its first
weekly gain in eight weeks, but has stayed below $100 a tonne
since May 19. It touched a 20-month low of $91.80 on May 30.
    

iron ore specifications

Fe 55
S 0.033
P 0.075
AI 1.2
SI 2.7
available to supply 20,000 MT / 60days

iron ore price

April 30, 2014 118.58
March 31, 2014 111.83
Feb. 28, 2014 121.37
Jan. 31, 2014 128.12
Dec. 31, 2013 135.79
Nov. 30, 2013 136.32
Oct. 31, 2013 132.57
Sept. 30, 2013 134.19
Aug. 31, 2013 137.06
July 31, 2013 127.19
June 30, 2013 114.82
May 31, 2013 124.01
April 30, 2013 137.39
March 31, 2013 139.87
Feb. 28, 2013 154.64
Jan. 31, 2013 150.49
Dec. 31, 2012 128.51
Nov. 30, 2012 120.35
Oct. 31, 2012 113.95
Sept. 30, 2012 99.47
Aug. 31, 2012 107.50
July 31, 2012 127.94
June 30, 2012 134.66

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