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Global supply of iron ore has fallen over 2019 and China039s port stocks are dwindling. So how highnbspcan prices go
-Iron ore markets currently facing a supply disruption of around -6-The physical squeeze on stocks may be passed as China039s steel production should seasonally slow-If India has to import more iron ore prices may linger above US80t CBA analysts suggestnbsp
Supply and demand for iron ore have aligned and prices have risen above US100t benefiting major Australian miners amid significant supply disruptions from their Brazilian counterpart Vale the world039s largest supplier.
Sentiment regarding supply after an acute tailings dam failure in Brazil this year has weakened. Vale has recently indicated it expects another tailings dam Gongo Soco currently not producing to fail if seismic activity at a nearby mine continues.
Historically Iron Ore 62 FE reached an all time high of 188.90 in February of 2011. Iron Ore 62 FE - data forecasts historical chart - was last updated on November of 2020. Iron Ore 62 FE is expected to trade at 116.91 USDMT by the end of this quarter according to Trading Economics global macro models and analysts expectations.
Commonwealth Bank analysts believed a breach of US100t for iron ore was always a chance following the supply disruptions that have affected the market including the fatal dam failure at Vale039s Feijao mine in January which triggered a series of mine closures across Brazil.
Vale has guided to reduced sales of iron ore down -50-75mt this year and its iron ore production is -93mtpa below levels before the dam disaster. Iron ore markets the analysts calculate are currently facing a supply disruption of around -6 of the seaborne market. Accounting for an increase in China039s iron ore output in response to higher prices this is only slightly better at -5.5.
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 164.70tonne barrier this week its highest since early 2014
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 Chinas demand for iron ore will remain strong over the course of the economic cycle.
The deals were agreed on the sidelines of the China International Import Expo and included FMG shareholder Hunan Valin Iron amp Steel Group.
Other steel firms in China such as Baotou Iron amp Steel Group and Rizhao Steel also signed agreements for FMGs iron ore.
Chinas 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.
Jun 28 2020nbsp018332Iron ore is Australias most-valuable export with the rally in prices and a weaker domestic currency pushing earnings to a record A103 billion
Sep 21 2020nbsp018332The retreat of iron ore prices from six-and-a-half year highs hit last week accelerated on Monday with the price of Fastmarkets MB benchmark 62
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Aug 21 2020nbsp018332Spot iron ore prices rose to around 130 a dry metric ton on Tuesday according to commodity price reporting agency Argus. This is the highest level
SampP Global Platts has been a progressive force in the evolution of the iron ore market by consistently and efficiently performing their price discovery role helping to build in a strong benchmark upon which other developments and achievements have built
SampP Global Platts support for iron ore added credibility and helped change the sentiment of the majority who said that this market could not be commoditized
The transformation of iron pricing 10 years ago provided all participants in the industry with an opportunity to better manage their price risk. It has brought more mature dynamics to the market and attracted many new people to participate in one of the worlds largest traded commodities
SampP Global Platts has broadened its coverage of iron ore ever since its inception going beyond 62 Fe materials to lump pellet and pork stock pricing. The market needs transparency and I think that SampP Global Platts can help to promote this
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