IRON and STEEL
China iron ore future edged up 4% today due to supply crisis from Vale over delay in resumption at Brucutu mines. Vale on Monday (6th May) was ordered by the Minas Gerais Court of Justice (Tribunal de Justiça do Estado de Minas Gerais - "TJMG") to hold production at its Brucutu mines.
The miner on 19th Mar had received court's order in favor of resumption at Brucutu mine and on 21st Mar, Vale received approval from the State Agency for Environment and Sustainable Development (SEMAD). Later, on 17th Mar the miner had received final approval for resumption at its Bruccutu mines.
Towards early Feb'19, Vale had shut operation at its Brucutu mines, causing a production loss of about 30 MnT pa. The move was a step ahead towards safety after iron ore producer underwent collapse at its dam at Corrego do Feijao mine in Minas Gerais in Brumadinho, Brazil on 25th Jan'19.
Vale reaffirms its iron ore and pellet sales estimate for the year to be at the low to mid-end of 307-332 MnT.
Average global iron ore fines prices increased amid material availability crisis
Monthly average global iron ore fines (Fe 62%) prices increased to USD 93/MT, CFR China in Apr'19 compared to USD 76/MT, CFR China in Jan'19. Australian major iron ore miners also announced reduction in iron ore guidance for the year as an effect of cyclone Veronica.
Malaysia has granted Australia’s Lynas Corp (ASX: LYC) an extension on its operating licence for a rare earths processing plant, subject to various conditions and valid only for six months, keeping alive concerns about the miner’s fate in the Southeast Asian country.
Indian iron ore export volumes for July’19 stood at 2.13 MnT, up 19% as against 1.79 MnT in June’19. On yearly basis, exports increased significantly compared to July’18 at 0.17 MnT.
Eastern China’s largest private ferrous scrap consumer and EAF steelmaker – Shagang Jiangsu Steel group has announced another price cut for all grades of domestic steel scrap procurement by RMB 30/MT (USD 4) effective from today 8th Aug’19. Notably, this is the second successive price lowering announced this week.
State-owned pellet maker - KIOCL (Kudremukh Iron Ore Company Ltd) recorded enhanced pellet production for first quarter FY20. The production recorded at 0.61 MnT, above the set target of 0.49 MnT. The production marked 38% increase Y-o-Y as against Q1 FY’19 production at 0.44 MnT.
In 1956, the giant Northshore Mining plant on the shores of Lake Superior was the first facility built in North America to make pellets out of taconite, a low-grade iron ore. It used a process developed at the University of Minnesota after the supply of high-grade natural ore in the state was nearly mined out.
World analytics market is full of different kind of forecasts, but mostly unworkable or partly workable. Actually, it doesn’t matter what price will be for raw materials, semifinished products or finished steel products. The target is to calculate the spread between raw materials and steel products. Let’s try to make a forecast from that side.