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Iron ore prices hurtle to a seven-year high, coking coal prices lag on quotas – Hellenic Shipping News

For the key steelmaking ingredients of iron ore and coking coal, it was a tale of two different markets this week.

The price of iron ore punctured the $US120 per tonne ($164.70/tonne) barrier this week, its highest since early 2014

This was on account of a stronger market for steel in China which is targeting massive investment in its infrastructure.

For the 62 per cent grade iron ore fines product, spot prices were transacting around $US121.75 per tonne, according to Metal Bulletin.

A week ago, iron ore cargoes delivered to ports in China were trading around $US116.85 per tonne, the price reporting agency said.

There are market indications that China’s demand for iron ore will remain strong over the course of the economic cycle.

A dozen Chinese steel companies have struck long-term supply agreements with Fortescue Metals Group (ASX:FMG).

The deals were agreed on the sidelines of the China International Import Expo and included FMG shareholder, Hunan Valin Iron & Steel Group.

Other steel firms in China such as Baotou Iron & Steel Group, and Rizhao Steel also signed agreements for FMG’s iron ore.

“China’s steel industry continues to outperform expectations, with crude steel production in the nine months to September 2020 reaching 782 million tonnes, and annual steel production expected to exceed 1 billion tonnes in 2020,” FMG chief executive Elizabeth Gaines said.

Prices for steel products in China climb on rising demand

Steel product prices in China are starting to rise, as are futures prices for hot rolled coil and reinforcing bar in China.

The price of steel reinforcing bar (rebar), which is used in construction and concrete, rose to $US605 per tonne, this week.

This is up $US22 per tonne on a week ago, according to reports.

Fresh environmental restrictions on steel plants in Tangshan are also creating demand for higher-grade iron ore.

Higher quality iron ore commands a higher price in the seaborne market, and the cost flows through the supply chain to consumers; in this case, steel mills in China.

Iron ore shipments to China are on a roll

China’s imports of iron ore increased in October to 106 million tonnes, representing a rise of 15 per cent on-year.

“China’s demand for iron ore imports has increased on the back of strong steel demand and positive steel mill margins,” said analysts at Commonwealth Bank of Australia in a report this week.

Beijing has primed its economy with stimulus money to offset a decline in activity from COVID-19 restrictions earlier in the year.

“China’s infrastructure sector has led China’s steel demand growth due to policy support after COVID-19,” said the analysts.

Meanwhile, Brazil’s iron ore shipments to China have started to increase again after hitting a seven-month low.

Vale, the South American country’s largest shipper of iron ore, has plans to increase its exports with new mine projects.

Port-side stockpiles of iron ore in China have risen to 129 million tonnes as of last week…..

Link here to the full Hellenic Shipping News article

Fortescue registers record iron ore shipments – Cadence Minerals

Fortescue Metals Group has achieved a record shipment of iron ore in the December 2019 quarter with 46.4 million tonnes.

This led to record shipments for the first half of the 2020 financial year with 88.6 million tonnes.

Fortescue chief executive Elizabeth Gaines expects shipments at the end of the financial year to be at the upper end of the 170 to 175 million tonne guidance.

“Once again, the Fortescue team has achieved outstanding results, demonstrated by multiple records,” Gaines said.

“Excellent operational performance across all mines, rail and port was maintained to deliver shipments of 46.4 million tonnes, a 9 per cent improvement on the corresponding period last year.”

The news came as Fortescue announced it was set to invest $US450 million ($666 million) into the next stage of its Pilbara energy connect program.

The program, called the Pilbara Generation project, will combine 150 megawatts of gas fired generation with 150 megawatts of solar photovoltaic (PV) generation.

This will be supplemented by large scale battery storage that will be constructed, owned and operated by Fortescue.

The Pilbara Generation project complements Fortescue’s existing $US250 million Pilbara transmission project announced last October, which will provide low cost power to the Iron Bridge magnetite project in the Pilbara region of Western Australia.

Together, the transmission and generation projects will provide Fortescue with a hybrid solar gas energy solution that will deliver low cost power to Iron Bridge.

Fortescue also came into an agreement with Alinta Energy last year to build the Chichester solar gas hybrid project.

It will see up to 100 per cent of daytime stationary energy requirements of the Chichester Hub iron ore operations in the Pilbara powered by renewable energy.

Gaines said this US$700 million commitment to electricity generation and transmission infrastructure would significantly slash carbon dioxide equivalent (CO2e) emissions.

“The modelling indicates by installing 150 megawatts of solar PV we will avoid up to 285,000 tonnes of CO2e per year in emissions, as compared to generating electricity solely from gas,” she said.

“Pilbara energy connect allows for large scale renewable generation such as solar or wind to be connected at any point on the integrated network, positioning Fortescue to readily increase our use of renewable energy in the future.”

Link here to view on the Australian Mining website

These record iron ore numbers are also indirectly driving recommissioning activities among previously mothballed iron ore mines.

In NE Brazil, a jv between AIM listed Cadence Minerals #KDNC and Singapore based commodities group IndoSino Pte Ltd will see the former Anglo American (AAL) and Cliffs Natural Resources owned Amapá iron ore project recommissioned.

With key rail concessions granted to Cadence for shipping in December, this large-scale iron open pit ore mine with associated rail, port and beneficiation facilities is expected to produce 5.3 million tonnes of iron ore by 2024.

#KDNC – Supply Disruptions Raise Morningstar Near-Term Iron Ore Price Forecasts


Near-term tightness in the iron ore market has persisted and intensified, with several developments in Brazil further restricting  Vale’s (VALE)supply and Cyclone Veronica off Australia interrupting Pilbara shipments. We’ve factored in a reduction of another 20 million tonnes in Vale’s output in 2019 and 10 million tonnes in 2020. We now expect Vale to produce 350 million tonnes in 2019 and 370 million tonnes in 2020, down from an estimated 390 million tonnes in 2018. For  Rio Tinto (RIO),  BHP (BHP), and Fortescue, we’ve lowered our forecasts by 10 million tonnes in total for 2019 due to the cyclone. The estimated 30 million tonnes of lost supply from Vale and the Pilbara in 2019 is a more than 1% reduction to the seaborne iron ore market.

Disruptions mean that higher-cost iron ore is needed to balance the market, such as from domestic mines in China. The iron ore price has averaged $83 per tonne year to date, well ahead of our prior $65 per tonne forecast for 2019. Accordingly, we are raising our near-term iron ore forecasts to $73 in 2019, $60 in 2020, and $50 per tonne in 2021. Our prior forecasts were $65 in 2019, $55 in 2020, and $40 per tonne in 2021. Our unchanged $40 per tonne long-term forecast now starts a year later, in 2022.

All major iron ore miners we cover benefit from the higher price forecasts, including Vale. However, for Vale, there’s uncertainty around the cost to rectify the Feijao dam failure and compensate the victims as well as legal action that may affect the operation of other mines. Fortescue benefits most because it’s an iron ore pure play and has lower margins than BHP or Rio Tinto, which brings greater leverage to the price.

We’ve not changed our $40 per tonne long-term forecast, given the relative flatness of the iron ore cost curve inside the steep tail of smaller-scale and marginal producers, most which we eventually expect to exit. Disruptions to Vale’s supply should resolve within the next few years. In terms of iron ore supply additions, the lost output from Vale, including Samarco, should come back in the medium term. The S11D project should also expand to reach capacity over the next few years. BHP and Rio Tinto should grow modestly as those companies reach their installed capacities.  Anglo American’s (NGLOY) Minas Rio mine in Brazil should add more than 20 million tonnes per year after being shut to rectify slurry pipeline leaks. Most of the additional output from Anglo will come in 2019. From a disrupted 2019 base of about 350 million tonnes, we expect Vale’s output to grow to around 425 million tonnes a year from 2023…..

Link to Morningstar for full article here

Salt Lake Potash #SO4 Enhances Senior Project Development Team

Salt Lake Potash Limited (Salt Lake Potash or Company) is pleased to announce that the Company has made several key executive appointments as development activities at the Goldfields Salt Lakes Potash Project start to rapidly increase.

  • Peter Cardillo as Project Director – Processing and NPI
  • Lloyd Edmunds as Project Director – Civil
  • Stephen Cathcart as Project Director – Technical
  • Appointments bring diversified technical, construction, operations and process infrastructure experience to the Company as it moves into rapid project development phase

Peter Cardillo has commenced in the role of Project Director – Processing and Non Process Infrastructure (NPI), and is responsible for the delivery of the SOP Process Plant and associated support NPI. He is a mechanical engineer with a history spanning 35yrs in the construction and project delivery of steel production plants, petrochemical facilities, materials handling and iron ore processing infrastructure. Mr Cardillo has substantial experience in the creation and management of multi-disciplinary teams associated with the successful development of process plant projects for companies such as Fortescue and BHP. He has a B.Eng (Mechanical – Honours) from the University of Wollongong.

Lloyd Edmunds joins as Project Director – Civil. He is responsible for the construction of lake infrastructure necessary for the delivery of harvest salts to the processing facility. Mr Edmunds is a civil engineer with more than 15yrs experience in construction management on large scale infrastructure projects working in key roles for leading project services firms in the resources sector for clients such as Adani, John Holland Group and Fortescue. He has a B.Eng (Civil) from University of Technology Sydney.

Stephen Cathcart joins the Company as Project Director – Technical, overseeing the Resource Definition, Studies and Approval functions. He is a respected senior mining executive with more than 25yrs experience working in operations management, integrated planning and technical services for companies such as Fortescue, BHP, Sons of Gwalia and Newcrest Mining. He has a B.Eng Science (Mining) from University of Queensland and an MBA from Curtin University.

Salt Lake Potash Chief Executive Officer, Tony Swiericzuk, said“I am excited that Stephen, Peter and Lloyd have chosen to join the Salt Lake Potash team as we work to realise the outstanding potential of the Goldfields Salt Lakes Project. Having previously worked closely together on project development and ramp-up at FMG and having achieved great successes, it is exciting to again share the opportunity to develop another outstanding project.  These appointments, which complement our existing team, will be instrumental in the rapid advancement of the Project and achieving our goal of developing the first salt lake SOP operation in Australia.”

For further information please visit www.saltlakepotash.com.au or contact:

Tony Swiericzuk

Salt Lake Potash Limited

Tel: +61 8 9322 6322

Jo Battershill

Salt Lake Potash Limited

Tel: +44 (0) 754 036 6000

Colin Aaronson/Richard Tonthat/Ben Roberts

Grant Thornton UK LLP (Nominated Adviser)

Tel: +44 (0) 20 7383 5100

Derrick Lee/Beth McKiernan

Cenkos Securities plc (Joint Broker)

Tel: +44 (0) 131 220 6939

Jerry Keen/Toby Gibbs


Shore Capital (Joint broker)

Tel: +44 (0) 20 7468 7967

Mayhem Amongst The Miners As Iron & Steel Prices collapse

Steel prices on the Shanghai futures index fell 5% in a single session yesterday, leading to a further 3.9% fall in iron ore prices. A knock on effect was felt on the worlds stock markets as mining shares followed suit and billions were knocked off the value of the four big majors, with more still to come. Vale was down by 4.5%, BHP by 4% and Rio Tinto by 2.2%. Australia’s Fortescue Metals was worst hit with a fall of 5.8%, making a total drop for the year so far of 40%.

As ever the Chinese are to blame, as their economy refuses to allow itself to be kick started.

Sign of the times perhaps that these are markets where US consumption appears to have become irrelevant.

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