Eurobench.com

voda 22 januari 2015 15:03

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Atlas Iron says production costs higher than sale price in December quarter

West Australian miner Atlas Iron said that it lost money on each tonne of iron ore it sold in the December quarter.

The company's latest production report shows that its total cost of production was AUD 66 per tonne over the period but it only made AUD 63 per tonne on the ore it sold. For the half year, production costs were AUD 67 a tonne and it sold iron ore at a net price of AUD 66 a tonne.

During the quarter, the company's average realised sale price was USD 57.45 per dry tonne after price adjustments.

On a conference call with journalists, Mr Ken Brinsden MD of Atlas Iron admitted Atlas had been losing money but he said that the company's profit margins had now improved because of the falling Australian dollar, falling oil price and cheaper sea freight rates. He said that "In late December we talked at an EBITDA level our headline breakeven price received being approximately AUD 67 a tonne. Since then we've seen in essence a AUD 4 a tonne reduction in sea freight. Now that would take our headline break even position down into the low AUD 60s."

Atlas shipped 3.8 wet tonne of iron ore over the December quarter, up from 3.1 wet tonne in the September quarter.

Mr Brinsden said that the company was continuing to cut costs and planned to reduce capital spending by AUD 25 million in 2015 to AUD 69 million.

Source - www.abc.net.au

voda 22 januari 2015 15:09

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Port Hedland and Dampier restarts iron ore export terminals as cyclone threat eases

The Pilbara Ports Authority said that 2 of the world's biggest iron ore export terminals, Port Hedland and Dampier in Australia, reopened on Tuesday following brief shutdowns due to the threat of a cyclone that never materialised.

Port Hedland, used by BHP Billiton and Fortescue Metals Group and accounting for about a fifth of all seaborne-traded iron ore was closed for 10 hours. Dampier, where Rio Tinto sends ore, was closed for 17 hours, according to the authority.

Forecasters said that the threat of a tropical cyclone developing in the warm Indian Ocean waters off Western Australia's Pilbara iron ore district had eased.

A tropical low on Monday had shown signs of intensifying to cyclone strength, leading the authority to close the ports and order all ships to evacuate.

Analysts said that the brief closures would do little to ease a global supply glut driving down iron ore prices.

Iron ore stood at AUD 67.80 a tonne, near a 5-1/2 year low of AUD 65.60 reached in December.

Any drop in shipments from the ports would be reflected in monthly export figures compiled by the authority and due in early February.

Source - Reuters

voda 22 januari 2015 15:13

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BHP may slash USD 4 billion investment plan on US shale

The News reported that BHP Billiton Limited may be forced to slash its planned USD 4 billion spending this year on US shale wells and book writedowns on its shale assets as it battles plunging prices for its biggest earners iron ore, oil and copper.

Analysts and investors said that the mining giant, which has cut capital spending for the past two years, needs further savings to have enough cash to meet a promise not to reduce its dividend with some tipping it could slice its US onshore drilling budget in half. The spending cuts could come as soon as Wednesday, when BHP will release its December quarter operational review.

US onshore drilling, the biggest single item in the company's capital budget, is seen as the easiest target after a 41% plunge oil prices, 16% drop in iron ore prices and 12% drop in copper prices over the past 3 months.

Other candidates for cuts in its USD 14.2 billion capital and exploration spending plan could be its longer-dated projects like BHP's Canadian Jansen potash project and Australian Olympic Dam copper expansion study.

Mr Richard Knights, an analyst at London-based investment bank Liberum, said that “When you are pushed up against the wall you have to make some difficult decisions, so all those things are possibilities. Commodity prices are falling very quickly, very sharply.”

Source - The News

viermeiden 22 januari 2015 15:19

0

L.s.,

BRUSSEL (AFN) - De wereldwijde staalproductie is afgelopen jaar toegenomen tot 1.662 miljoen ton, 1,2 procent meer in vergelijking met een jaar eerder. Dat bleek donderdag uit cijfers van de World Steel Association.

China produceerde in 2014 ruim 822 miljoen ton, een stijging van 1,4 procent in vergelijking met 2013. Het land is verantwoordelijk voor bijna de helft van de wereldwijde staalproductie.

De Japanse productie steeg met 0,1 procent tot 110,7 miljoen ton. De Zuid-Koreaanse productie steeg met 7,5 procent tot 71 miljoen ton en in de Verenigde Staten ging de staalproductie met 2 procent omhoog naar 121,2 miljoen ton.

De productie in de Europese Unie steeg met 1,7 procent op jaarbasis tot 169,2 miljoen ton. Daarvan werd circa een vierde in Duitsland geproduceerd, waar de productie 0,7 procent toenam. Italië was goed voor 23,7 miljoen ton, een daling van 1,4 procent. Ook in Frankrijk (min 2,9 procent tot 16,1 miljoen ton) en Spanje (min 0,6 tot 14,2 miljoen ton) verminderde de productie.

viermeiden

voda 22 januari 2015 15:21

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The dry-bulk market prices plunge in China

A forecaster who tracks the dry-bulk market is growing increasingly concerned about the recent decline in Chinese steel prices.

In a client alert Mr Jeffrey Landsberg of Commodore Research pointed out that the average price of hot rolled coil now stands at roughly CNY 2,925.00 per ton.

The researcher said that Chinese steel and global iron ore prices have plummeted roughly 6.3% and 5.6%, respectively, since the start of 2015.

Mr Landsberg said that “By comparison, Chinese steel prices fell by approximately 14% last year while global iron ore prices fell by almost 50%.”

In briefing the forecaster argued that China's steel industry is experiencing what he described as “entirely new challenges” that weren't present in 2014.

He said that “This is a major change that the market is now seeing. The continued slowdown in China's overall economic growth remains on the mind to many, but unfortunately the slowdown is nothing new.”

He added that “What is new is that Chinese steel mills' profitability is being threatened. This is entirely new to 2015, as 2014 had previously seen the decline in global iron ore prices dwarfing the decline in Chinese steel prices.”

Mr Landsberg argued that, if this trend continues, there may come a point where Chinese steel production and overall iron ore consumption decreases.

When contacted by TradeWinds the forecaster pointed out that the fallout would prove particularly problematic for capesize bulkers.

He said that “The dry-bulk market is already in a weakened state and cannot afford demand for iron ore imports to come under any pressure,” he explained

He added that “If Chinese steel prices continue to fall there is a good chance that Chinese steel mills profitability will disappear and that Chinese steel production will fall. This would most hurt the capesize segment of the market.”

Source - www.tradewindsnews.com

voda 22 januari 2015 15:22

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Ms G Rinehart's Roy Hill mining operation admits crane safety problems

AAP reported that Ms Gina Rinehart's Roy Hill mining operation has had a crane incident while safety inspectors were observing the operation and has blamed its contractors for serious issues.

The private West Australian company issued a statement late on Tuesday saying that the incident involved a crane during a test supervised by an independent plant inspector who was assessing the competency of equipment and operator, days after the states Department of Mines and Petroleum issued a prohibition notice.

Mr Barry Fitzgerald CEO of Roy Hill said that "Roy Hill recognises that there have been serious issues in regard to safe lifting and crane operations being undertaken by head contractor Samsung C&T and Leighton Construction at the mine processing plant construction site."

He said that "The incidents that have occurred are not acceptable. We have escalated this issue to the highest levels. We have also seconded our most senior safety person to Samsung C&T to drive a step change in regards to safe lifting operations."

Last month, Roy Hill had to call in police to investigate after a worker bit into a piece of cyanide-laced kiwifruit. The company said it believed the incident was isolated.

Source - AAP

voda 22 januari 2015 15:22

0

Daar is een hoop staal voor nodig...

Qatar to award USD 30 billion infrastructure projects

It is reported that the infrastructure projects pipeline in Qatar is set to surge this year with the awarding of over USD 30 billion worth of new deals including the Al Karaana petrochemical complex and the Doha Metro.

The latest data from Meed Projects, a leading online projects tracker in the region, said that the record year has come on the back of major project awards on Ashghal's expressway and local roads and drainage programmes as well as significant investment in real estate and transport projects such as Lusail and the New Port project.

The report comes ahead of the annual Meed Qatar Projects Conference which runs from March 10 to 11 in capital Doha.

Mr Ed James, the director of analysis at Meed Projects, said that "Despite falling oil prices, Qatar has the project pipeline, the political impetus, and the financial reserves to continue spending as it prepares to host the Fifa 2022 World Cup."

Mr James said that this year will be boosted by the likely awarding of the USD 5 billion Al Karaana petrochemical complex contract, the USD 2 billion rolling stock and systems contract on the Doha Metro, and 5 main multi-billion-dollar packages on the mega water reservoirs main packages.

He said that the project spending will be boosted by the fact that Qatar continues to be the fastest-growing economy in the GCC in the years to 2020 as the country presses ahead with one of the world's most comprehensive and ambitious economic development and infrastructure programmes.

Qatar's Ministry of Development Planning and Statistics said that the country's economy was expected to expand by 7.7% in 2015, providing evidence that the world's leading LNG exporter expects lower oil prices will have minimal impact on growth.

The ministry said that “Solid expansion in non-hydrocarbon activities will continue to drive overall economic momentum, propelled by investment spending, an expansionary fiscal stance and population growth. In the calendar years 2014-2016, the overall fiscal balance is expected to stay in surplus.”

Mr Sheikh Abdulla Saoud Al Thani, Qatar Central Bank governor will be highlighting the resilience of Qatar's economy and its commitment to the objectives of the Qatar National Vision 2030.

It will also be one of the key themes of Meed's upcoming conference which will be addressed by keynote speakers include Mr Remy Rowhani, the director general of the Qatar Chamber of Commerce and Industry; Mr Sheikh Nasser bin Abdulrahman bin Nasser Al Thani, chairman of Daruna; Mr Ahmad Abdulla Al Abulla, the CEO of Barwa group; Dr Yousef Alhorr, the chairman of the Gulf Organisation for Research & Development (Gord) and Mr Ahmed Nasser Al Nasser, the director at the Qatar General Electricity and Water Corporation.

Mr Ahmed Nassar Al Kowsi, logistics director at Qatar Rail, and senior representatives of the Public Works Authority (Ashghal) will also address the conference.

The major topics to be covered include the national development strategy; trends and opportunities in the banking and finance sector and news about Qatar's latest energy and infrastructure projects.

Source - TradeArabia News Service

mvliex 1 22 januari 2015 16:01

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Wereldwijde staalproductie toegenomen

Gepubliceerd op 22 jan 2015 om 15:10
BRUSSEL (AFN) - De wereldwijde staalproductie is afgelopen jaar toegenomen tot 1.662 miljoen ton, 1,2 procent meer in vergelijking met een jaar eerder. Dat bleek donderdag uit cijfers van de World Steel Association.

China produceerde in 2014 ruim 822 miljoen ton, een stijging van 1,4 procent in vergelijking met 2013. Het land is verantwoordelijk voor bijna de helft van de wereldwijde staalproductie.

De Japanse productie steeg met 0,1 procent tot 110,7 miljoen ton. De Zuid-Koreaanse productie steeg met 7,5 procent tot 71 miljoen ton en in de Verenigde Staten ging de staalproductie met 2 procent omhoog naar 121,2 miljoen ton.

De productie in de Europese Unie steeg met 1,7 procent op jaarbasis tot 169,2 miljoen ton. Daarvan werd circa een vierde in Duitsland geproduceerd, waar de productie 0,7 procent toenam. Italië was goed voor 23,7 miljoen ton, een daling van 1,4 procent. Ook in Frankrijk (min 2,9 procent tot 16,1 miljoen ton) en Spanje (min 0,6 tot 14,2 miljoen ton) verminderde de productie.

voda 22 januari 2015 16:06

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Was al geplaatst door Viermeiden hoor. :-)

Nah ja, beter 2x, dan niet.

voda 23 januari 2015 19:42

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Steel ministry seeks pre budget hike in import duty on steel to 10%

ET reported that India’s steel ministry has sought an immediate hike in import duty on finished steel to 10% from the present level of 5 to 7.5% and a withdrawal of duty on raw materials iron ore and coking coal in the light of surging steel imports up by 58% during April-December 2014

While these have been part of its Budget recommendations, the move gathered significance recently with the ministry shooting off an urgent letter to the finance ministry to implement a pre budget change in duty rates.

The report cited some sources as saying that India steel minister Mr Tomar wrote to finance minister Mr Jaitely earlier this week pointing to the extremely challenging situation being faced by the domestic steel industry in the wake of a surge in imports from China, Japan, South Korea and Russia. At the same time, he has said that domestic players are under financial stress, utilizing less than half the capacity at the plants in the wake of the economic slowdown.

While the move, if implemented, would provide positive sentiments to Indian steel mills, it is unlikely to curb surge in imports as 2.5% on the current import levels of about USD 450 per tonne CFR is just about USD 10-12 per tonne where as the import prices are in free fall nullifying the extra cost on imported cargoes. Moreover, a huge quantity of steel is also being imported from countries like Japan and Korea, due to the free trade agreements between India and these countries that allows preferential tariffs.

Source – Strategic Research Institute

voda 23 januari 2015 19:43

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POSCO opens 1.8 million tonne auto grade CR steel plant at Mangaon

South Korean steel giant POSCO has opened its third plant in Maharashtra further solidifying its presence in one of the world's fastest growing economies.

The company held a ceremony Thursday marking the completion of its new plant at Mangaon in Maharashtra. POSCO Chairman Mr Kwon Oh-joon attended a ribbon cutting ceremony with Indian steel minister and about 250 high ranking state government officials and executives of carmakers.

The new facility will produce 1.8 million tonnes of automotive steel

POSCO began the construction of the USD 709 million plant in November 2011.

The facility has already been producing auto grade steel sheets since June and providing materials to automakers in India

In 2012, POSCO opened its first Indian plant capable of producing 450,000 tonnes of galvanized steel plates annually and the second with an annual capacity of 300,000 tonnes of electrical steel sheets in 2013. Both plants are located in Maharashtra Province.

Source – Strategic Research Institute

voda 23 januari 2015 19:43

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Indian government to sell 10pct stake in iron ore miner NMDC - Report

PTI reported that the Indian government has sought expression of interest from reputed merchant bankers for divesting 10% stake in iron ore miner NMDC that could fetch about INR 5,500 crore to the exchequer.

The government has 80% stake in the company and post stake dilution, which is likely next month through offer for sale (OFS) route, it would come down to 70%.

It said that “The government is considering to divest 10% paid-up equity share capital of NMDC out of its shareholding of 80% in the domestic market through offer for sale of shares by promoters through stock exchanges.”

It added that “Proposals are invited from reputed merchant bankers, either singly or as a consortium, with experience and expertise in public offering/OFS in capital market, to act as merchant bankers/selling brokers and to assist and advise government in the process.”

Against its target of mopping up INR 43,425 crore through selling stakes in various public sector undertaking firms during the current fiscal, the government has so far been able to garner INR 1,715 crore by selling 5% of its stake in SAIL.

Source – PTI

voda 23 januari 2015 19:48

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Chinese steel output in 2014 grows at slowest rate since 1981

China's steel production in 2014 grew at its slowest rate in more than 3 decades as a cooling economy curbed demand and the government moved to tackle overcapacity and pollution.

Data from the National Bureau of Statistics showed that steel output reached a record 822.7 million tonnes up by just 0.9% YoY, the slowest growth rate since 1981.

While the low growth rate suggests China's authorities have had some success in efforts to lower production and close polluting plants, there is a strong possibility of upward revisions to the 2014 data. The 2013 preliminary figure issued in January 2014 was revised by almost 30 million tonnes from earlier 779.0 million tonnes to 815.4 million tonnes in January 2015.

According to a calculation form China Iron and Steel Association, China's apparent crude steel demand fell 3.4% YoY to 738.3 million tonnes in 2014 as decline in domestic demand has been masked by rising exports, which reached the equivalent of 84.4 million tonnes of crude steel over the period

CISA does not foresee any major improvements in the domestic steel market going into 2015, with weak demand and excess supply still weighing on prices. It said “Affected by overcapacity, it is unlikely there will be any turnaround in oversupply in the steel product market or any big recovery in prices.”

Steel production has doubled in just 8 years, with China driving its economy through the expansion of heavy industry, but this has led to severe overcapacity and hazardous pollution problems, particularly in northern regions. In a move to improve air quality, Beijing has taken the toughest measures ever to order steel mills to curb production, while sharp falls in steel prices and high inventories have also forced some steel mills to rein in production.

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Source – Strategic Research Institute

voda 23 januari 2015 19:49

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Arrium flags AUD 1.33 billion write downs and shuts one mine

Arrium Limited has turned its back on the iron ore expansion it built over recent years, announcing that it will close one of its two iron ore mining precincts in South Australia and cut its capital expenditure by 30 per cent.

Arrium confirmed it would shut the Southern Iron operations it bought from WPG Resources for AUD 320 million in 2011. It also flagged asset write downs of AUD 1.33 billion, the vast majority of which will apply to its iron ore business. It said "The redesign of the mining business announced today will provide a step change in the mining business' cash costs and capital requirements.”

The mothballing of its Southern Iron mining operations will mean 200 of its workers and about 380 contractors will go.

The Southern Iron operation was pivotal in the company's recent strategy to broaden its operations beyond being a vertically integrated steel producer, to become a major iron ore exporter as well. The strategy also precipitated the change of name from OneSteel to Arrium.

The company's Middleback Ranges iron ore mines will continue to operate, but the change will see Arrium's annual iron ore production fall from about 12.5 million tonnes to about 9 million tonnes per annum.

Arrium Mining Quarterly Production Report For the quarter ended 31 December 2014

1. Sales and shipments 3.29Mt (dmt), in line with guidance
2. Average Platts market index price (62% Fe CFR) US$74/dmt, down US$16/dmt on prior quarter
3. Average realised price ~US$64/t CFR (dmt), down US$9/t on prior quarter
4. Average realised price ~A$74/t CFR (dmt), down A$4/t on prior quarter
5. Average grade of shipments 59.6% Fe
6. Average cash cost loaded on ship A$45.7/wmt1, down from ~$A48/dmt1 average for FY14
7. Total cash cost A$70.2/dmt2, down from ~A$73/dmt2 average for the prior year
8. First ores from re-development of Iron Knob Mining Area expected end Q3 FY15

Market
Market prices continued to be impacted by the balance between iron ore supply and demand, and related negative sentiment. Average prices again declined in the quarter, but were relatively flat through December, albeit at low levels. The Platts 62% Fe index averaged US$74/t CFR (dmt), a US$16/t decrease compared to the prior quarter. Arrium’s average price of US$64/t CFR (dmt) was down US$9/t compared to the prior quarter. On an FOB basis, Arrium’s average price was down US$10/t to US$50/t (dmt)5. In Australian dollars, Arrium’s average price for the quarter was $74/t CFR (dmt). The average realised price for the quarter was impacted by factors including prior period and current period price adjustments related to the decline in market prices.

Production and Shipping
Hematite ore mined for export in the Middleback Ranges was 2,872k (wmt) for the quarter, up 33% on the prior quarter. Ore mined at Peculiar Knob in our Southern Iron operation was 1,355k (wmt), up 14% compared to the prior quarter. Ore shipments for the quarter were in line with guidance at 3,291k (dmt). A further port loading record was broken in December with 204,678 wmt loaded onto the M/V Heng Shun.

Costs
Arrium Mining’s average cash cost loaded on the ship (excluding royalties and depreciation) was A$45.7/wmt for the quarter, in line with prior quarter and A$2.4/wmt below the average cash cost for FY14. Materials processed for the quarter were marginally more costly than the previous quarter but were offset by cost initiatives. Arrium’s total cash cost for the quarter was A$70.2/dmt, down from ~A$73/dmt average for FY14. The business continues to have a significant focus on lowering its cost base.

Arrium is an international diversified mining and materials company listed on the Australian Securities Exchange. The company has three key business segments: Arrium Mining, Arrium Mining Consumables, and Arrium Steel. Arrium's mining operations are located in South Australia: the Middleback Ranges, approximately 60 kilometres from the Whyalla township; and Southern Iron, which includes the Peculiar Knob tenement, located approximately 90 kilometres from the Coober Pedy township. Arrium Mining Consumables comprises the Moly-Cop grinding media business, Moly-Cop Ropes, AltaSteel Steel Mill and Waratah Steel Mill, with businesses located in Canada, The USA, Mexico, Peru, Chile, Indonesia and Australia. The Arrium Steel segment is comprised of the Steel and Recycling businesses. In May 2013 the company announced that it was combining its Steel Manufacturing and Steel Distribution businesses to form a single Steel business.

Source – Strategic Research Institute

voda 23 januari 2015 19:50

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Spot iron ore price levels keep declining before Lunar Holiday

Iron ore levels touched lowest level in 5-1/2 years, hurt by abundant supply and slow steel demand in China as steel mills are cutting down on production and iron ore consumption before Lunar Holidays (18th Feb to 24th Feb).

Spot iron ore prices for iron ore fines, lumps, concentrate, sinter feed and pellets declined on Thursday by USD 1 per tonne further for most origins and grades

In unison, Iron ore for May delivery on the Dalian Commodity Exchange was down 1.8 percent at CNY 487a tonne, after hitting a session low of CNY 484 per tonne

According to UBS Group AG, the global iron ore surplus will swell from 35 million tonne this year to more than 200 million tonne by 2018. Prices will average USD 66 a tonne this year, 22% less than previously forecast and USD 65 in 2016, down 21%.

Source – Strategic Research Institute

voda 23 januari 2015 19:57

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South Korean steel and iron imports from China jump to 6 year high

It is reported that South Korea's iron and steel imports from China jumped to a 6 year high last year, causing worries that the low-priced products might hurt local steelmaking companies.

According to the data from the Korea Iron & Steel Association, South Korea's imports of iron and steel products from China increased 34.9% YoY to 13.4 million tons last year.

The amount is the largest since 2008, when 14.31 million tonne were imported from China.

The association attributed the spike to an oversupply of steel production in China that couldn't find demand at home and ended up flowing into the Korean market.

An association official said that "The sense of crisis among local steelmakers is growing as low-priced Chinese products are flooding the market."

South Korea's total iron and steel imports came to 22.74 million tons last year, up 17.3% from a year earlier, the data showed. Imports from Japan contracted 5.3% YoY to 7.31 million tons.

Source – Yonhap

voda 23 januari 2015 19:58

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Outlook positive for prefabricated metal building industry in 2015

According to the 2015 Dodge Construction Outlook, the onset of 2015 has begun with all indication of continuation and expansion of the previous year’s booming construction growth. US construction starts are predicted to rise by 9%, an increase in the 2014 prediction of 5%.

With construction starts anticipated to top USD 600 billion, the Metal Building Manufacturer Association estimates more USD 2 billion to be allocated to metal buildings.

A rebounding economy and loosening construction lending coupled with crippling supply, manufacturing growth, and consumer spending rise has provided for the rise in demand for metal buildings.

Throughout 2014 many metal building suppliers had to expand to keep up.

Mr Sean Hackner, founder and CEO of Freedom Steel Buildings in Delray Beach, Fla, said that “This past year we grew our project management, engineering, and customer service departments to maintain customer expectations. The momentum we see going into 2015 is unlike anything seen in the last 5 years.”

Source – The Fabricator

voda 24 januari 2015 16:14

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Indian steel industry will be wiped out if imports continue - Kalyani Steel

Mr RK Goyal MD of Kalyani Steel, in an interview with Mr Anuj Singhal and Ms Ekta Batra on CNBC-TV18

Mr Anuj - Any update on your demand on import duty of steel products or do you believe that something like this could come in the Budget?

A - As of now there is nothing. We are expecting government should take some initiative and something should happen. Just for your information, particularly long products import has gone up by 550% in Q3 and in terms of volume it has gone up to the level of 450,000 tonnes in last quarter. On annualised basis it becomes 1.8 million tonne against the total demand of the industry around 4 million tonne and if this continues, I think the local industry will be wiped off.

Ms Ekta - Can you tell us the reason for the surge in imports? Is it because of dumping that is taking place because of currency depreciation in say the Ruble or maybe it is from China? Take us through the scenario.

A - Major imports are coming from China besides from various other countries including Europe, including Russia. The reason is that the economic situation or the slowdown in the growth in China -- since local demand in China is going down, they are trying to find out avenues to export that material and India is a good ground for them where there are practically no restrictions and a reasonable size market for them.

Ms Ekta - How much of an import duty hike would you like to see and how much do you think it will protect the industry at this point in time?

A - I think a marginal increase in import duty from 9-10% will not affect Chinese because they will reduce the price further. We need to have some other trade barriers by which this entry of this material to the country is restricted.

Ms Ekta - What would these other trade barriers be which you would possibly ask the government to implement and what might even be the progress on it?

A - The first and foremost will be whenever such surge in imports are there from any specific country, it can have safeguard duty, which can be implemented fairly fast and then the duty level will be something in the range of 30% to 50%. If such a thing happens, only then it will reduce the imports from China and in a longer period maybe in six months time anti-dumping duty on Chinese products for at least next five years.

Mr Anuj - What is the situation domestically in terms of the iron ore situation?

A - As far as iron ore is concerned since the demand of steel is going down -- demand for iron ore is also little low but at the same time, prices are stable, quality is further deteriorating particularly in Karnataka and hence the cost to the manufacturer is higher.

Source - Money Control

voda 24 januari 2015 16:19

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S&P cuts metal price forecasts for 2015 to 2017

Global rating agency Standard & Poor’s has revised its metal price forecasts for 2015 to 2017. The agency lowered its price forecast for all key commodities. The iron ore and copper price forecasts witnessed significant downward revisions.

According to S&P, the agency is likely to come up with some negative ratings action and outlook changes over the next two weeks, as the portfolio of credits are reviewed. Most of the industrial metals may see erosion in prices on account of weaker supply-demand balances. The decline in production costs may also result in lower prices for key commodities.

The iron ore price forecast has been cut by nearly 20% from the earlier forecast of USD 85 per tonne for 2015 and 2016 made in last October. It now assumes the iron ore price to average at USD 65 per tonne during 2015 and 2016. The prices are likely to rise marginally by USD 5 per tonne to USD 70 per tonne in 2017. This is the third cut in iron ore price forecast during the past one year. The agency had predicted iron ore prices at USD 100 per tonne during early 2014.

The cut in production effected by a few high-cost producers on account of declining prices will be balanced with fresh supply from major iron ore producers. It expects nearly 100 million tonne of seaborne supply to hit the market in 2015. The rise in supply together with waning Chinese demand growth may limit any potential recovery in prices.

The copper forecast for 2015to 2017 has been reduced to USD 2.70/lb from the earlier forecast of USD 3.10/lb. S&P anticipates further fall in copper demand on account of fears of slow economic growth by Asian countries. The sharp drop in currencies of copper producing countries against the US dollar may bring down the production costs for copper.

Source - Strategic Research Institute

voda 24 januari 2015 16:20

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Rio Tinto iron ore production in 2014 up by 12% YoY

Rio Tinto has released its operations review for the Q4 and the full year 2014. Iron ore production rose sharply in 2014, as compared to the previous year. This is consistent with the company’s strategy to expand iron ore production, despite a subdued iron ore pricing environment. The company is banking upon economies of scale to drive its results, capitalizing on its low-cost iron ore deposits.

Consolidated iron ore production at Rio’s facilities stood at 295.4 million tonne, of which the company’s share was 239.9 million tonne. Production attributable to Rio Tinto was 12% higher YoY.

The sharp increase in volumes was primarily due to the ramp-up of production to a rate of 290 million tonne per year at Rio’s Pilbara operations in May 2014. Located in Western Australia, the Pilbara iron ore mines represent nearly 95% of Rio’s global iron ore production.

Rio Tinto is expanding capacity at its iron ore mines, despite a subdued iron ore pricing environment. The company is banking upon robust Chinese demand for iron ore in the long term, driven by rapid urbanization.

Global iron ore prices have plummeted over the last year or so, due to expansion in production by major mining companies. Supply has outpaced demand resulting in an oversupply situation.

However, Rio Tinto, with its low-cost iron ore deposits, can continue to operate profitably in the prevailing subdued iron ore pricing environment. Rio’s cost of production stands at around AUD 50 per tonne. Iron ore spot prices stood at AUD 68 per dry tonne at the end of December 2014, about 50% lower than at the corresponding point of time a year ago. The outlook for iron ore prices remains bleak in the near term, in view of the oversupply situation.

Falling iron ore prices in an oversupplied market, will put pressure on the margins of domestic Chinese iron ore producers, which have higher costs of production as compared to Rio, as well as margins of high-cost seaborne iron ore suppliers. A further reduction in prices may see a curtailment in operations by high-cost iron ore producers. This will constrain supply and benefit low cost producers such as Rio.

Rio Tinto is planning to further expand the production capacity of its Pilbara iron ore operations. Plans to increase mine production capacity to 360 million tonne per annum by 2017 from the current 290 million tonne per annum capacity have already been approved. Logistics infrastructure for the 360 million tonne per annum expansion is 80% complete, with all rail, marine, and wharf works in place.

The success of Rio’s high iron ore volumes strategy will depend upon the strength of Chinese iron ore demand in the long term. With the country consciously reorienting its economy from an investment-led model to a consumption-led model, it remains to be seen whether Rio’s expectations of sustained Chinese demand are well-founded.

Source - Strategic Research Institute

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Verschil	-1,450 (-4,76%)
Hoog	30,770
Laag	28,980
Volume	4.429.592
Volume gemiddeld	2.986.909
Volume gisteren	4.319.928

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