Iron Ore - General Commentary

[Miner]

There are so many iron ore companies and I thought why not start a new thread with general commentary , news on iron ores which of interest all iron ore stocks non specific to a particular thread

With this preamble I am posting this news on iron ore situation in India and relationship with Chinese Ore market. This definitely leads to some direction to Australian ore
Note is derived from yahoo site which is meant for all and no copy right issue

UPDATE 1-Indian iron ore prices drop on lower China shipments
(Adds details, analyst comment and byline)

By Arpan Mukherjee

MUMBAI, June 12 (Reuters) - India's prices of iron ore for export have dropped 8-11 percent as stockpiles build up at Chinese ports, trimming demand from its leading customer, the head of a trade body said on Thursday.

"There is a demand, but the interest for Indian cargo has been weak," Rahul Baldota, president of the Federation of Indian Mineral Industries told Reuters.

China is the main market for India's iron ore exporters such as Sesa Goa Ltd . India exports about 90 million tonnes of iron ore, and most of the sales are done on a spot basis.

The export price of ore has dropped by $10-$15 a tonne to $115-120 in the past six weeks, Baldota said, adding a combination of factors had led to the fall.
"Australian cargo is available in the spot market. Secondly, stocks are lying at various ports in China and prices were also very high, which cumulatively led to this," he said.

Stockpiles of imported ore at Chinese ports hit an all-time high of nearly 80 million tonnes last month, and severe congestion there is contributing to a rise in freight rates.

 

[renim]

also news from india, some locals blew up the power to a iron ore mine causing loss of production for a week or so. main recipient of the ore was to be the Japanese. combine this with moves to increase export tax on iron ore (to help contain domestic steel price and inflation)

 

[grace]

There is a thread that most post to called "iron ore". Perhaps we could merge these threads or something?????

 

[Mofra]

also news from india, some locals blew up the power to a iron ore mine causing loss of production for a week or so. main recipient of the ore was to be the Japanese. combine this with moves to increase export tax on iron ore (to help contain domestic steel price and inflation)

Adds further weight of evidence to ensure any iron ore exposure one has is predominately hematite as magnetite smelting costs are still exhorbanent in comparison due to the increase in oil and/or thermal coal costs.

 

[Ann]

India May Step Up Pellet Sales to Fill Supply Gap From Vale Cuts

India’s pellet exports are expected to rise as buyers seek alternative sources of iron ore following output cuts by Vale SA after a deadly dam breach, according to the local arm of Fitch Ratings Ltd.

Overseas sales may rise as much as 20 percent in 2019 from about 9 million metric tons last year as countries such as China, Japan and South Korea that depend on Brazil will now source pellets from India, according to Rohit Sadaka, associate director at India Ratings and Research Ltd.

More....

 

[Ann]

Thought I would take a look at the Iron Ore chart on a long term monthly view. 91 looks like an overhead resistance line, lets see if it can hammer on through!

 

[Ann]

On the daily chart, Iron Ore has slipped below 86.00 closing at 85.15.

 

[Ann]

Vale Mine Ruling Has Analysts Weighing Iron Ore Market Impact

A Brazilian court ruling that authorized Vale SA to restart a mine that was closed after a dam burst is generally positive for the company but could cause a spillover effect in the iron ore market, which saw a surge in prices in the wake of the deadly disaster, analysts said. More...

 

[Ann]

China Isn't Ready for Iron-Ore Deficit, Steelhome's Wu Says

China’s steel industry isn’t prepared for a looming shortage of iron ore, the metal used to make the building material that last week rose to its highest price in almost five years, according to a prominent industry adviser in China.

Prices will “absolutely” continue to increase as mine closures in Brazil spur a market deficit in the second half of the year, Wu Wenzhang, founder and president of Shanghai Steelhome Information Technology Co., said in an interview Saturday. Iron-ore prices surged to the highest since July 2014 at $95.90 a ton on Friday, according to Mysteel data. More...

...and a daily chart

 

[Ann]

This article mentions a few of our miners, may be worth a read...

Nerves of Steel Are Needed If Iron Rally Is Over: Taking Stock

Consolidation: day 11. The Stoxx Europe 600 is still stuck in a tight range as the earnings season is getting in full swing. The first results have been generally ok so far, albeit with a low bar. Looking at sector performances, the mining sector is still the top this year and miners have been partying on soaring iron ore prices. But there’s a shift in the newsflow this week, which could crash the party. More...

 

[Ann]

This is going to affect all iron-ore stocks quite profoundly I would suspect....

Iron ore miners tumble after Vale allowed to restart Brazil mine

Australian iron ore miners have shed more than $7 billion in value on Wednesday after Brazilian courts allowed Vale to re-open an iron ore operation that was closed following a fatal mine dam disaster.

Vale's Brucutu iron ore mine will resume operations after it was closed when tailings dams burst in January, flooding the town of Brumadinho in Brazil's Minas Gerais state and killing hundreds. It means about 30 million tonnes of iron ore will come back onto the market. More...

So far the increased supply of Iron Ore has yet to be reflected in its price....

 

[kahuna1]

It already has ... if you read ...

have shed more than $7 billion

 

[Ann]

It already has ... if you read ...

have shed more than $7 billion

That was " Australian iron ore miners have shed more than $7 billion".

The chart I put up is the spot price for Iron Ore. It has fallen -2.09% for the week. Not a massive drop or particularly out of the ordinary.
Looking at other Commodity falls for the same week...
Coal -2.36%
Nickel -2.73%
Zinc -3.42%
Rhodium -2.82%
Neodymium -4.26%
Manganese -3.80%
Natural Gas -6.53%

So the weekly fall of -2.09% for Iron Ore is no big deal for the spot price. The spot price was $76 when Vale Dam collapse was announced back at the end of January.

 

[Ann]

Looking at the monthly chart for Iron Ore, the price is holding and improving slightly after Vale came back online. I would have thought this would give support for the main iron ore plays like BHP, FMG, MGX and the others.

 

[Ann]

Gloom Spreads in Steel as Car Woes and Trade Tensions Bite

The world’s biggest steelmakers are bracing for tough year as trade disputes and weakening automotive demand cast a chill over the sector.

ArcelorMittal, which posted its lowest quarterly profit since 2016, warned Thursday that the European steel market will be far weaker than expected this year as demand contracts and producers struggle against cheap imports. The world’s biggest steelmaker also lowered its forecast for demand outside of China.


The gloom spreading through the steel industry marks a sharp reversal after two years of bumper profits, driven by strong demand across all major markets and slowing exports from China. Now, creaking economies in Europe and increased trade tensions are undermining the recovery. More...

 

[Ann]

Iron Ore Powers Above $100 as Supply Crisis Roils Global Market

Iron ore rallied above $100 a ton, surging to the highest since 2014, as investors bet that a global supply crunch will spur a scramble for cargoes just as China’s mills push out record volumes of steel.

Benchmark spot ore climbed 2.5% to $100.35, according to Mysteel Global. Earlier, most-active futures in Singapore jumped as much as 3.8%, while miners’ shares powered ahead, with Fortescue Metals Group Ltd. hitting the highest since 2008. More...

 

[Miner]

Big time iron ore miners on Monday - several factors now - Liberal Win, Market Demand and general business uplift . Shares to watch BHP, RIO, FMG, MGX, MIN - some juniors will get the shadow and move unpredictably north as well.
My current holding is only BHP and MIN.

 

[Ann]

I have been wondering why the iron ore miners have been a bit weak of late. The price of Iron Ore is still traveling well which should have kept them going, on my chart which only shows from 2013 it looked like the resistance should be around $110.



....however I then found a chart with a longer time frame and there is a resistance support line just a whisker under the current price. This chart looks a bit dodgy in that it appears to be missing information.
It appears both the IC chart and this one is Iron Ore 62%. I will give you an explanation as to what it is...

Iron Ore 62% FE

Iron ore prices refer to Iron Ore Fine China Import 62 percent grade Spot Cost and Freight for the delivery at the Chinese port of Tianjin.

Now I will put up another chart which doesn't look quite as dodgy this is just referred to as ...

Iron Ore
Iron ore prices refer to Iron Ore Fine China Import 63.5 percent grade Spot Cost and Freight for the delivery at the Chinese port of Tianjin.

This closed above that resistance line by a whisker also to $105.50....

 

[Trav.]

This caught my eye today, after mentioning that there were supply issues in the BHP thread.

(Bloomberg) -- Iron ore surged past $100 a ton as supply woes in Brazil coincide with sustained, robust demand in top steel producer China.

https://finance.yahoo.com/news/iron-ore-futures-power-toward-081301662.html

 

[Dona Ferentes]

This caught my eye today, after mentioning that there were supply issues in the BHP thread.

(Bloomberg) -- Iron ore surged past $100 a ton as supply woes in Brazil coincide with sustained, robust demand in top steel producer China.

the Brazilian supply chain is impacted by Covid-19

Iron ore shipments from Brazil have fallen by almost a quarter in May because of the country's coronavirus crisis, which is one of the worst in the world, said Macquarie analyst Serafino Capoferri. Brazil exported 15.27 million tonnes of iron ore in the first three weeks of May, down from 19.4 million tonnes in the comparable period of 2019, when exports were already lower than normal following the fatal dam collapse at Vale's mine in Brumadinho.
"The situation in Brazil is pretty much out of control," said Mr Capoferri. He said the pandemic had caused difficulties at the country's mines, which are more labour-intensive and require people to work closer together than mines in Australia.

Vale has said the coronavirus will reduce the amount of iron it is able to produce this year. The company said in late April it will mine between 345 million and 370 million tonnes of iron ore powder and pellets in 2020, around 40 million tonnes less that it previously expected. Brazil as a whole mined 480 million tonnes of iron ore in 2019, according to the US Geological Survey, a fifth of global production and second only to Australia