Vale

Year-on-year output of iron ore fell in November for the first time. Chinese output in January-February is always significantly lower due to seasonal closures in northern China due to winter weather, but they may not come back if prices stay low. It is our view that Chinese iron ore output in 2015 will be lower by around 20% year-on-year – taking around 80 m tpy (of 62% Fe equivalent) out of the market.

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Therefore, we believe that at current prices, the iron ore market will begin to rebalance in 2015. Now this will not be followed by an immediate increase in prices as inventories accumulated substantially in 2014, but analysts’ projections of surpluses of 150 m tons are wide off the mark – very simply, where would it be stored given the already-high Chinese inventories?

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The iron ore majors’ approach seems to be that prices may be falling but profitability can be maintained by economies of scale. As a result, smaller mines that do not enjoy the same economies of scale are struggling. Reuters points to exports from Iran – the world’s eighth-biggest supplier on the seaborne market – which fell by a third in June from a year ago to just 1.2 million tons.

FREE Download: The Monthly MMI® Report – covering Steel/Iron Ore markets.

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The world’s second-largest iron ore miner, Brazil’s Vale SA, was temporarily foiled by Brazilian Indians who blocked the railway that gets iron ore from Vale’s Carajas mine to port, Reuters reports. “Vale did not say how much iron ore had been held up by the protests, which were not directed at the company. The railway, known […]

It seems as though we’re reporting almost weekly that one commodity boom or another is finished. In fact, actual commodity price volatility may not be as volatile as commodity prognostication volatility. Nevertheless, here’s the latest installment. ANZ global head of commodities research Mark Pervan told Australian Mining that “the good phase for low-cost companies BHP […]

The Biggies – BHP Billiton, Rio Tinto, Vale – are lamenting the end of the commodities super cycle. Via The Australian: “Over past three months the value of mining service companies has fallen by more than 35 per cent, or a massive $17 billion, in arguably the biggest single sectoral destruction of value since the dotcom […]

ThyssenKrupp, the German steelmaker, looks close to finally off-loading its troubled Steel Americas group, according to a Reuters article. The new service quotes a spokesman as saying Thyssen aims to reach a deal in the near future and is currently in intense negotiations – principally, it would seem, with front runner Cia. Siderurgica Nacional, or […]

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Continued from Part One. Vale already owns the S11 concession, for which it paid some $8 billion, and is planning to spend another $11.4 billion on infrastructure to reach full iron ore production, according to Reuters – an investment beyond the limits of some small states, let alone a single project for a mining company. The phrase […]

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The scale of the iron ore mining industry is mind-boggling. Some 95% by weight of all metals production is in the form of steel, and with the exception of scrap feed for the EAF market in the US and Europe, much of that is supplied as iron ore. No wonder the seaborne iron ore freight […]

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The steel billet cash price fell 1.4 percent on Sept. 27, 2012 to $345.00 per metric ton on the LME, making it the day’s biggest mover on MetalMiner’s steel price index. Also on the LME, the steel billet 3-month price declined 1.3 percent to $346.00 per metric ton. As the China Iron & Steel Association […]

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Continued from Part One. Chinese shipbuilders are mostly keeping their heads down. Of the 19 ore carriers Vale intends to own outright and the additional 16 they intend to lease, 20 are said to be either being built or planned for construction at Chinese yards. Beijing says their concern is on safety grounds, but in reality, […]

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