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Iron Ore, The Iron Ore Industry
frodo
post Posted: Mar 23 2021, 01:17 PM
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In Reply To: nipper's post @ Mar 23 2021, 10:03 AM

Hi Nipper I read a few months back that China had built two enormous ships in order they can carry as much iron ore from Africa where I think they are invested.
Australia better find a new commodity that’s in demand as I wouldn’t want to be holding iron ore LT.

 
nipper
post Posted: Mar 23 2021, 10:03 AM
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The sell-off in iron ore prices continue[d] Monday as the price of the most traded iron ore type globally, 62% Fe fines delivered to northern China, again fell. The Fastmarkets index price fell to $US157.01 on Monday, down $US4.38 on the day, or 2.7% and under the December 31 level of $US160.47. And the price of 62% Fe fines is now down 10.6% so far in March .... they ended February at $US160.47 a tonne.

The price of the higher quality 65% Fe fines (mostly from Brazil) ended at $US184 a tonne on Monday, down $US3.50 a tonne from last Friday. That means the 65% Fe price has fallen 7.5% from the end of February level ($US199.40 a tonne) but remains above the December 31, 2020 level of $US172.90 a tonne.

....

Driving the fall has been the fallout from the crackdown on polluters among steel makers in Tangshan, one of China's major steelmaking centres that has seen the price of the most popular ore type lose more than 10% of its value so far this month.

The crackdown intensified over the weekend with the penalties against 23 steelmaking companies in Tangshan revealed ... production (capacity) cuts for some or all of 2012.

Analysts say if the Tangshan measures cut steel production in the region by 22 million over the year, iron ore imports could fall by more than 30 million tonnes ; the bulk of which would hit Australian exporters as we supply 70% or more of China's annual imports.

A total of 23 steel mills (crude and stainless and other specialty types) have been caught not following previous production cuts aimed at lowering winter smog levels.




https://www.sharecafe.com.au/2021/03/23/ore...tion-crackdown/



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jan 17 2021, 09:14 AM
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There is a tropical low brewing in WA just to the NW of Dampier.
Might well be a Cyclone by end of next week.
Even if it does not form, likely the Iron ore shipping will be suspended for a while as there will still likely to be some servere marine warnings.
Mick



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early birds
post Posted: Dec 24 2020, 08:36 AM
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In Reply To: nipper's post @ Dec 24 2020, 08:26 AM

https://www.afr.com/markets/commodities/iro...20201224-p56pxa

Fastmarkets MB said iron ore fell $US2.50 or 1.5 per cent to $US162.03 a tonne. The spot price has now tumbled more than 8 per cent from the record high of $US176.45 reached on Monday.

This does however beg the question, is it enough to support prices around $US180 a tonne into January? So far, it looks as if it is more than enough."

==================

not sure of that
i reckon usd$ 110--120 /t is more likely case next year!!

i'm little bit biased here , because i shorted RIO at $116.64, little bit in the money atm , but small stake. think ore price might be drop through USD$150/T before year end, that will bring RIO under $110 in short term
all imho though. a risk one [ i for one think it's more likely case[ over 75% chance].



 
nipper
post Posted: Dec 24 2020, 08:26 AM
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Iron ore futures soared to all time highs this week in China, more than doubling from April levels, prompting the local exchange operator to warn of a speculative bubble as Beijing sent signals that could foreshadow government intervention....


Accordingly, producers and officials in Beijing closely follow the price of iron ore, and have pushed for China to play a larger global role in determining its price.

That price has soared in recent months, with the benchmark contract on the Dalian Commodity Exchange rising nearly 10 per cent on Monday alone to 1144.5 yuan ($231) a ton, a record since the contracts began trading in 2013.

.... if something like a basic commodity rises 10% in a day, then even I am going to label it a bubble

(( ....updating ....The spot price of iron ore slid for a second day, as a wave of profit taking took the wind out of Chinese futures amid new trading rules and amid concern about the emergence of a new coronavirus variant in the UK.
Fastmarkets MB said iron ore fell $US2.50 or 1.5 per cent to $US162.03 a tonne. The spot price has now tumbled more than 8 per cent from the record high of $US176.45 reached on Monday))



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Dec 14 2020, 06:34 PM
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Iron Ore Price Rips Higher Even As Cyclone Threat Dissipates

QUOTE
Fears of supply disruptions caused by a tropical low at Port Hedland helped drive the rises on Thursday and Friday. But the low has gone and Port Hedland is now back and has restarted loading at its various ports. Tonnage lost was minimal, which might see any immediate price rise capped today.

The price of 62% Fe fines rose $US3.55 or 2.4% to $US160.13 a tonne, delivered to northern China. That helped the price over the week end up 10.4%. The price so far in December is up 21.65% and looks very much in a boom and that will, if past history is any guide, end in tears and a big slide.....

[and of course] .... the sharp rise in iron ore prices has triggered a moan from the Chinese steel industry. A group of Chinese steel producers on Friday called on the country's market regulator and securities regulator to investigate the recent spike in iron ore prices, according to Reuters.....


https://www.sharecafe.com.au/2020/12/14/iro...eat-dissipates/



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


mullokintyre
post Posted: Sep 10 2020, 10:15 AM
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Interesting post by Robert Gotliebson in todays OZ

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Australia must brace itself for the next round of the war of words and actions with China – an attack on the price of iron ore and the nation’s key revenue base.

My China contacts tell me that the anger China is currently displaying over issues like Australia’s call for a COVID-19 inquiry and journalistic disputes is minuscule compared to the fury in China created by the recent jump in the price of iron ore.

Rightly or wrongly, Chinese President Xi Jinping believes that Australia has ruthlessly exploited the COVID-19 pandemic to force China to pay exorbitant prices for iron ore. Xi is determined to teach us a lesson as early as next year, but certainly in the years to come.

Australia has undertaken a massive domestic expenditure program to reduce the economic impact of the pandemic and has been able to fund at least part of that expenditure by the massive tax revenue that is being generated by the high price of iron ore.
If China succeeds in slashing the price of iron ore next year and in the following years, Australia will feel great pain. But so will the shareholders in BHP, Rio Tinto and Fortescue, who have been basking in higher profits and dividends in the wake of the higher iron ore price.

Of course if China is successful in slashing the iron price it will, almost certainly, reduce the value of the Australian dollar which will cushion some of the impact of the lower mining profits when converted to the Australian currency.
‘Australian extortion’

The Chinese belief that the current iron ore price is simply Australian extortion imposed on China is partly frustration over a series of events that coincided to send the price higher than anyone could have expected.

Earlier this year in the midst the early stages of the pandemic, iron ore fell to around $US80 a tonne. At that level, the local Chinese production incurs losses, so production was curtailed.

China was able to contain the effects of COVID-19 more effectively than any other developed nation and to restart its economy it embarked on a major program of infrastructure and property investment, so increasing the demand for steel and iron ore.

China’s second largest supplier, Brazil, could not respond to the higher demand because its main producer, Vale, became a victim of COVID-19 infection.

In contrast, Australian iron ore mines did not become infected with COVID-19 and lifted output marginally.
The combination of increased demand and restricted output by local Chinese producers, as well as Vale, set the scene for the big price rise to around the $US125-130 mark — the highest since 2014 and the largest rise of the major commodities.

To slash the price China is looking to increase local production, which is profitable at prices above dollars $US90 a tonne. And it expects that next year Vale will be able to produce greater tonnages.

At the same time, this latest Chinese round of capital investment is similar to what happened at the end of the Japanese capital investment boom: new capital expenditure was of marginal value and often totally useless. Accordingly, the Chinese expect to decrease their capital spending next year and look to consumers to fill the gap. At the same time, it is likely that exports to the US will decline further in 2021 – particularly if Donald Trump wins a second term.

Teaching us a lesson

Then, in China’s view, Australia will be taught a lesson about not exploiting a pandemic against your main trading partner. But in Australian, eyes we are simply benefiting from a market price increase just as we suffer from market a falls. There is no extortion.

But China will take its plan to lessen dependence on Australian iron ore to a second stage and is encouraging Brazil to open up new mines and new deep water ports to enable the Chinese supercarriers to take Brazilian ore to China at costs that are comparable or lower than to transport from Australia, where smaller ships are used.China hopes that this will further lower the iron ore price and decrease Australia’s role in the trade. Further down the track China, with the help of London-based Rio Tinto, hopes to open the massive Simandou iron ore mines in Guinea.

I suspect the full force of the lesson China plans to teach Australia will be felt by BHP. The Big Australian played a large role in converting iron ore contracts from fixed price to market price around a decade ago and the largest shareholder in Rio Tinto – BHP’s major iron ore rival – is a Chinese state owned enterprise, Chinalco. It will be fascinating to see the reaction of Chinalco in the Indigenous caves issue that is putting the job of Rio CEO Jean-Sébastien Jacques under pressure from Australian institutions.

China believes that the Australian currency is vulnerable to a big fall in the iron ore price, given its huge deficits and dependence on borrowing. And so a collapse in the iron ore price will inflict significant punishment on the recalcitrant nation down under.

Not sure how much I believe in terms of what China thinks, but I guess we will know soon enough if shipments from WA strt to drop off.
The Macgowan govt then will be looking a little red faced as its major source of revenue starts to drop off, just when it will be going deeper into debt.
The Feds will be in a similar boat, though they are less dependant on iron ore, but have a lot of competing interests for the fed handouts.
Could be interesting.
Mick



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nipper
post Posted: Sep 4 2020, 09:39 AM
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Iron ore price benchmarks firmed overnight, with 62% Fe closing above US$130.80/t, and 58% Fe to US$117.35/mt.

Prices rallied on steel mill restocking ahead of holidays in October, which is expected to support prices through September, and on expectations for accelerating construction and infrastructure activity through September and October, said Commonwealth Bank commodity strategists.

The ANZ strategy team said real estate activity is even stronger than it was before the COVID19 crisis began and that is partly supporting iron ore prices. Housing transactions have picked up strongly on the back of pent-up demand, particularly in China, the ANZ strategists said. This sector consumes about 40 per cent of total steel consumption and it also has important implications for downstream demand. We see iron ore benefiting from this over the next six to nine months.





--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jul 24 2020, 07:22 PM
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Chinese thirst for Australian iron ore has just registered an all time record of $9.4 billion in a single month, helping to drive a big bounce in overall exports. Preliminary figures from the Australian Bureau of Statistics showed the bounce in exports means Australia is likely to have recorded a 30th successive trade surplus in June.

June exports to China increased by 7 per cent, or about $1 billion, to $14.5 billion. The jump in iron ore exports to China pushed the total exports of iron ore for financial year 2020 to over $100 billion, representing more than a quarter of Australia’s total goods exported for this period ( and likely to provide a comparatively small but helpful boost to the government's deficit of $85.8 billion.)





--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 27 2020, 01:24 PM
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And in Forbes, though the correspondent is familiar and local

https://www-forbes-com.cdn.ampproject.org/v...ron-ore-boom%2F



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 
 


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