Iron ore steady with a chance of slipping as China out

Wednesday, 25 Jan 2012

Reuters reported that iron ore steadied with trading activity nearly halted as top market China remained shut recently for the Lunar New Year holiday blunting any impact from miner Vale decision to lift a force majeure on Brazilian shipments.
Vale, the world No 1 iron ore producer said it has resumed mining and export operations after rains eased in southeastern Brazil. Vale earlier this month declared force majeure on iron ore shipments from Brazil a legal clause that allows a company to break contractual obligations because of heavy rains that cut its output by around 2 million tonnes.

Mr Dhruv Goel managing director at iron ore trading firm SteelMint in India eastern Orissa state said there are hardly any deals in the spot market with the Chinese away for the holiday and chances are prices may slip marginally.

But Mr Goel said Chinese demand for lower grade Indian iron ore has improved recently and he expects it to continue after the holiday. He said that "Chinese buyers are interested in buying low grade from India, as cargoes from Australia and Brazil are generally high grade."

India biggest iron ore miner, NMDC Ltd has resumed operations in the central state of Chhattisgarh which accounts for two-thirds of its annual ouput of 25 million tonnes after protests disrupted railway movements for 10 days.

Local protests had forced NMDC to halt production and exports of iron ore from the mines. The protest was called off after the federal government agreed to improve the overall rail network in the Bastar region a predominently tribal area that has roughly a fifth of India iron ore deposits.

Reflecting a slump in Chinese buying, the Baltic Exchange main sea freight index which tracks rates to ship dry commodities fell to its lowest in more than three years on Monday.

(Sourced from Reuters)

Iron Ore-Steady with a chance of slipping as China out

Tue Jan 24, 2012
* Vale lifts force majeure on Brazilian shipments
* India's NMDC resumes supply from major mines
* Global steel output growth slows in 2011

SINGAPORE, Jan 24 (Reuters) - Iron ore steadied with trading activity nearly halted as top market China remained shut on Tuesday for the Lunar New Year holiday, blunting any impact from miner Vale's decision to lift a force majeure on Brazilian shipments.

Vale, the world's No. 1 iron ore producer, said on Monday it has resumed mining and export operations after rains eased in southeastern Brazil.

Vale earlier this month declared force majeure on iron ore shipments from Brazil, a legal clause that allows a company to break contractual obligations, because of heavy rains that cut its output by around 2 million tonnes.

Iron ore with 62 percent iron content .IO62-CNI=SI was unchanged at $139.80 a tonne on Monday, according to Steel Index.

There are hardly any deals in the spot market with the Chinese away for the holiday and chances are prices may slip marginally, said Dhruv Goel, managing director at iron ore trading firm SteelMint in India's eastern Orissa state.

But Goel said Chinese demand for lower grade Indian iron ore has improved recently and he expects it to continue after the holiday.

"Chinese buyers are interested in buying low grade from India, as cargoes from Australia and Brazil are generally high grade," he said.

India's biggest iron ore miner, NMDC Ltd, has resumed operations in the central state of Chhattisgarh, which accounts for two-thirds of its annual ouput of 25 million tonnes, after protests disrupted railway movements for 10 days.

Local protests had forced NMDC to halt production and exports of iron ore from the mines. The protest was called off after the federal government agreed to improve the overall rail network in the Bastar region, a predominently tribal area that has roughly a fifth of India's iron ore deposits.

Reflecting a slump in Chinese buying, the Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in more than three years on Monday.

Expected slower growth in China's steel production this year could similarly curb its demand for raw material iron ore.

China's crude steel output rose 8.9 percent to around 683 million tonnes in 2011, versus a 9.3 percent clip in 2010. A Reuters poll in mid-December showed the country's steel output may reach 728 million tonnes this year, 6.5 percent higher than 2011.

Globally, steel production rose 6.8 percent to 1.527 billion tonnes in 2011, less than half the 15 percent increase in 2010, data from the World Steel Association showed on Monday.

(sourced Reuters)

Iron Ore-Seen treading water this week with China away

Mon Jan 23, 2012

* Iron ore posts first weekly loss in five last week
* Limited downside risk seen for iron ore-analyst

SINGAPORE, Jan 23 (Reuters) - Spot iron ore prices may be little changed this week with top buyer China off for the Lunar New Year holiday, and stockpiles at Chinese ports more than enough to meet any immediate demand.Iron ore with 62 percent iron content .IO62-CNI=SI was nearly flat at $139.80 a tonne on Friday, according to Steel Index, ending 1.7 percent lower last week, its first weekly loss in five.
Demand for the steelmaking ingredient in the spot market thinned sharply last week as trading activity ground to a halt ahead of this week's holiday.Those seeking small cargoes this week can readily secure
material from Chinese ports, traders said, where stockpiles of imported iron ore stood at 98.41 million tonnes last week, up 1 percent from the previous week, data from industry consultancy Mysteel showed on Friday.

Traders are relatively optimistic iron ore prices, languishing near two-week lows, will rebound after the holiday, with steel prices gradually edging higher.The most-traded May rebar contract on the Shanghai Futures Exchange hit a three-month high on Friday, and finished last week up 2.2 percent, its biggest gain since early December."I don't see much downside risk for iron ore because China continues to produce steel and liquidity is improving although not significantly," said Henry Liu, head of commodity research at Mirae Asset Securities. At current steel and iron ore prices, Chinese producers of
long steel products still make a margin of 150-200 yuan per tonne ($24-32), said Liu.Data released on Saturday showed China diversified its spot iron ore buying away from India in 2011, largely in favour of
South Africa, but failed to reduce its dependence on term purchases from top suppliers Australia and Brazil.
China imported 64 percent of its iron ore from Australia and Brazil, unchanged from the year before, while iron ore purchases from India dropped by 24 percent, as exports from that country were curbed by policy restrictions.

Iron ore indexes
PLATTS 62 PCT INDEX 140.75 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 139.8 0.10 0.07
METAL BULLETIN INDEX 139.56 -0.15 -0.11
*Index in dollars/tonne, show close for the previous trading day

($1 = 6.3390 Chinese yuan)
(sourced Reuters)

Iron Ore-Upward momentum intact on tight supply, demand

Wednesday, 16 November 2011

Limited supplies and sustained buying interest from top consumer China lifted spot iron ore prices for an 11th straight day and the market stayed well bid on Tuesday, suggesting the upward momentum may not lose steam soon.

Firmer Chinese steel futures this month helped iron ore rebound from a more than 30 percent slide in October, encouraging steel mills to replenish run-down inventories of the raw material.
Iron ore with 62 percent iron content rose 0.4 percent to $138.30 a tonne on Monday, the highest since Oct. 24, according to the Steel Index.

Iron ore has gained 18.3 percent over the past 11 trading sessions.
"We're getting regular inquiries from China for cargo, from steel mills and traders and there isn't a lot available out there," said an iron ore trader in Shanghai who sells mostly Indian material to Chinese buyers.

Iron ore supply in the spot market has thinned with fewer tenders from Australia and Brazil, the world's two biggest iron ore exporters, while shipments from third-ranked India remain disrupted by logistical problems and the government's crackdown on illegal mining, traders said.
"Some of the sellers also feel that the market is rising and a lot of people are going to ask them for cargo so they want to hold off for a bit to get better prices," said the Shanghai trader, adding that prices may go up another $5-$10 from current levels.

Some buyers are bidding $148 a tonne, cost and freight for Indian high-grade 63.5/63 iron ore fines, said Dhruv Goel, managing director at Steel Mint in India's eastern Orissa state.
That is well above the offer price on Tuesday of $142-$145 a tonne of the Indian material in China, according to Chinese consultancy Umetal. Offers for Australian and Brazilian ore rose a further $1-$3 a tonne, Umetal said.

Despite rising prices, many Indian exporters, whose costs are inflated by export tariffs and high railway freight rates, are unwilling to sell at current levels, traders said.

Including freight, the cost of producing 63.5/63 grade in India is about $145-$150 a tonne, the Shanghai trader said. "It doesn't make sense to export at a loss. The mine owners can sell it to the domestic market where the return is better," he said.

Signs of easing credit conditions in China, particularly towards small and medium sized enterprises, may be helping steel prices recover some ground with product inventories at Chinese mills back to near recent lows on a days-of-supply basis, Commonwealth Bank of Australia said in a note.

"Declining inventories might reflect a combination of some production cuts, much lower pricing, better access to credit for SMEs and robust underlying demand," the bank said.

"To the extent underlying steel demand remains robust and credit conditions continue to ease in a 'targeted' fashion, we see China's commodity demand and prices as reasonably well supported."
The most-active May rebar contract on the Shanghai Futures Exchange eased 0.8 percent to close at 4,157 yuan a tonne on Tuesday, after two sessions of gains. Despite the loss, rebar is up 0.6 percent so far in November after three months of decline.

Source: Reuters

Sierra Iron Ore completes second tranche of financing

Thursday, 15 Sep 2011

Sierra Iron Ore Corporation announce that it has received additional subscription agreements totalling 286,360 units completing its 2nd tranche of the non-brokered private placement offered to qualified investors for additional gross proceeds to the company of USD 229,088 .

The total of both tranches of the non-brokered private placement will result in the issuance of 3,824,941 million units at a price of $0.80 cents per unit; each unit consists of one common share and one-half of one share purchase warrant. A full warrant entitles the holder to acquire one additional share at a price of USD 1.00 for 24 months from closing. All securities issued are subject to a hold period of four months from closing. Finders' fees will be paid to qualified parties.

The private placement will provide general working capital and an allocation for the financing of the company exploration/development field work program at the El Creston property.

China Shipowners Association fears Vale control of freight market

August20, 2011

Zhang Shouguo, executive vice chairman of the China Shipowners Association (CSA), has stated in an interview with Bloomberg that Brazilian mining giant Vale is seeking to control the freight market just as it controls the iron ore market.

Vale is currently building up a fleet of 19 400,000-dwt vessels for iron ore transportation, while it will rent a further 16 vessels for the same purpose. Mr. Zhang said that Vale should leave responsibility for freight to the shipping companies. He also said that with its new fleet Vale would completely control iron ore shipments between China and Brazil. (sourced steelorbis)

Rio tinto says iron ore market to remain tight

Apr 14, 2011 10:50pm GMT

SYDNEY, April 15 (Reuters) - The global market for iron ore will remain tight in the near to medium term, with demand running strongly and new supply coming on slowly, miner Rio Tinto said.

"We believe that the market for iron ore will remain tight in the short to medium term with delays to new supply and strong demand driving prices," the world's second-largest producer of the steel-making raw material said in a statement released to the Australian stock exchange on Friday.

(Reporting by Mark Bendeich; Editing by Balazs Koranyi, Thomson Reuters)

FREIGHT REPORT: Rates to China gain some traction as decline comes to an end

14 February 2011

Friday's levels: Australia-China (Port Hedland/Dampier-Qingdao) Capesize: $6.65-6.7. Brazil-China (Tubarao-Qingdao) Capesize: $17.9-18.2. India-China (Paradip-Vizag-Qingdao) Supramax: $13.5. Daily chartering rates to China rose on Friday as fixtures were concluded at higher prices, brokers told MB. Freight... Read More on this…

Tags: Freight report , iron ore freight , iron ore routes to China , iron ore market , Baltic Cape Index , Freight Investor Services , FIS , Clarkson Securities , Metal Bulletin

Indian iron ore exports in December down by 25pct

Tuesday, 25 Jan 2011
Iron ore exports in December have gone down by 24.64% to 9.69 million tonnes, continuing its declining trend for the sixth consecutive month.
According to the data compiled by the Federation of Indian Mineral Industries, the country had shipped 12.86 million tonne of iron ore, a vital steel making raw material, during the same period last year.
Mr RK Sharma FIMI secretary general told PTI that “The industry has been suffering from quite some time now due to the ban imposed by Karnataka in July. We hope that the issue will get resolved by next month, when the Supreme Court hears the matter.”
He added that “industry is expecting that the Karnataka Government will put in place a mechanism to check illegal mining by mid-February, as per the apex court directions.”
Last week, the Supreme Court asked the State Government to either notify the new law against illegal mining within two weeks or lift its order banning transportation of iron ore meant for export, saying that the ban cannot be sustained indefinitely.
Earlier, the Karnataka government had banned issue of permits to transport iron ore and other minerals for export purposes for six months pending a legislation to curb illegal mining. The period will end this month.
He added that “In this situation, the country would have immensely benefited had the ban not been imposed by Karnataka government.”
(Sourced from PTI)

Fangchenggang imported iron ore prices hold stable

Thursday, 20 Jan 2011

It is reported that spot price of imported iron ore in Fangchenggang port remains steady today. Currently, 63.5% Brazilian coarse fines is quoted at CNY 1330 per tonne to CNY 1350 per tonne.
Mainstream iron ore varieties at Fangchenggang port, such as Brazilian and Australian iron ore fines are mainly held by big traders. Most of these products are offered at high prices. Recently, market transactions slow down, as steel mills reduce the usage rate of imported iron ore in face of expensive iron ore prices.
Besides, impacted by passenger transport during the Spring Festival, railway loading capacity is generally insufficient. Only a few big steel plants maintain normal delivery. This also constrains end demand.
Southwest areas are hit by snow weather recently. According to some steel mills, steel sales are not so satisfactory currently. Despite the high price, actual trades are rather sluggish.
Sourced from MySteel.net

Indian Iron ore sold at $188.50/T, highest since Feb 2008

By Manolo Serapio Jr

SINGAPORE, Jan 19, 2011 (Reuters) - Key iron ore price indexes were on track to hit record highs on Wednesday, with spot prices closing in on $200 a tonne, aided by strong Chinese buying ahead of the Lunar New Year and persistent worries over tight supply.
Rising prices of steelmaking materials like iron ore as well as coking coal, after floods ravaged top producer Australia, drove Shanghai steel rebar futures to a record high for a third time in less than a week.
High-grade Indian ore was sold in the spot market this week at $188.50 a tonne, including freight, a level not seen since spot prices hit a record around $200 in February 2008.
Indian ore with 63.5 percent iron content was being quoted at $192 a tonne on Wednesday, said an Indian trader in Orissa.
"The way buyers are buying, the price will touch $200 although exporters in India are becoming cautious on how long the prices can be sustained," he said.
With global steel demand shaky, iron ore spot prices which have rallied since the year started, could be prone to a correction soon with some buyers from No. 1 importer China turning cautious as prices approach record highs, traders said.
"There's underlying fear that iron ore prices are going up a bit too fast," said a physical iron ore and steel trader in Singapore.
"I don't see end-users jumping to buy steel so I don't know how these prices can be sustained," he said, adding traders are dominating iron ore purchases instead of steelmakers, suggesting the rally is driven by speculative activity instead of real demand.
The outlook for the global steel sector is stable with the worst behind the industry after the economic downturn, although recovery is still relatively slow and not expected to accelerate, Standard & Poor's lead analyst Andrey Nikolaev said on Tuesday.
The most active rebar futures in the Shanghai Futures Exchange rose to a contract peak of 4,941 yuan per tonne on Wednesday, as raw material prices climbed. It closed at 4,931 yuan, up 0.4 percent.

Indian iron ore mining mess - Goa iron exports may plunge by Karnataka ban

Sunday, 16 Jan 2011

Ban on iron ore transportation from the neighboring Karnataka and truckers' strike at home may reduce the state's iron ore exports this season.

Goa Mineral Ore Exporters Association predicts a downfall OF at least 10% in the iron ore exports, considering the trend till December 2010 when it exported 28 million tonnes of ore against the season's expectation of 53 million tonne exports. Of the total 53 million tonne ore, 45 million tonne was from the 100 local mining leases while the rest was transported from the neighboring state of Karnataka.

GMOEA Secretary Mr Glen Kalavampara told PTI that "Since last two months, there is a ban on transportation of ore from Karnataka. Also, local factors like strike by truckers play a role in adding to the woes.”

The truckers transporting the ore have struck work, demanding higher rates for the transportation.

Sourced from PTI

Iron ore, Magmatic magnetite ore, Hematite ore, production and consumption, Iron ore market

By Wikipedia, the free encyclopedia
Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4), hematite (Fe2O3), goethite (FeO(OH)), limonite (FeO(OH).n(H2O)) or siderite (FeCO3). Hematite is also known as "natural ore", a name which refers to the early years of mining, when certain hematite ores containing up to 66% iron could be fed directly into iron-making blast furnaces. Iron ore is the raw material used to make pig iron, which is one of the main raw materials to make steel. 98% of the mined iron ore is used to make steel.
Indeed, it has been argued that iron ore is "more integral to the global economy than any other commodity, except perhaps oil”.
SourcesMetallic iron is virtually unknown on the surface of the Earth except as iron-nickel alloys from meteorites and very rare forms of deep mantle xenoliths. Although iron is the fourth most abundant element in the Earth's crust, comprising about 5%, the vast majority is bound in silicate or more rarely carbonate minerals. The thermodynamic barriers to separating pure iron from these minerals are formidable and energy intensive, therefore all sources of iron used by human industry exploit comparatively rarer iron oxide minerals, the primary form which is used being hematite.
Prior to the industrial revolution, most iron was obtained from widely available goethite or bog ore, for example during the American Revolution and the Napoleonic wars. Prehistoric societies used laterite as a source of iron ore. Historically, much of the iron ore utilized by industrialized societies has been mined from predominantly hematite deposits with grades in excess of 60% Fe. These deposits are commonly referred to as "direct shipping ores" or "natural ores". Increasing iron ore demand, coupled with the depletion of high-grade hematite ores in the United States, after World War II led to development of lower-grade iron ore sources, principally the utilization of taconite in North America. Lower-grade sources of iron ore generally require beneficiation. Magnetite is often utilized because it is magnetic, and hence easily separated from the gangue minerals and capable of producing a high-grade concentrate with very low levels of impurities. Due to the high density of hematite relative to associated silicate gangue, hematite beneficiation usually involves a combination of crushing, milling, gravity or heavy media separation, and silica froth flotation. One method relies on passing the finely crushed ore over a bath of solution containing bentonite or other agent which increases the density of the solution. When the density of the solution is properly calibrated, the hematite will sink and the silicate mineral fragments will float and can be removed.
Iron ore mining methods vary by the type of ore being mined. There are four main types of iron ore deposits worked currently, depending on the mineralogy and geology of the ore deposits. These are magnetite, titanomagnetite, massive hematite and pisolitic ironstone deposits.
Magmatic magnetite ore depositsOccasionally granite and ultrapotassic igneous rocks segregate magnetite crystals and form masses of magnetite suitable for economic concentration. A few iron ore deposits, notably in Chile, are formed from volcanic flows containing significant accumulations of magnetite phenocrysts. Chilean magnetite iron ore deposits within the Atacama Desert have also formed alluvial accumulations of magnetite in streams leading from these volcanic formations.
Some magnetite skarn and hydrothermal deposits have been worked in the past as high-grade iron ore deposits requiring little beneficiation. There are several granite-associated deposits of this nature in Malaysia and Indonesia.
Other sources of magnetite iron ore include metamorphic accumulations of massive magnetite ore such as at Savage River, Tasmania, formed by shearing of ophiolite ultramafics.
Another, minor, source of iron ores are magmatic accumulations in layered intrusions which contain a typically titanium-bearing magnetite often with vanadium. These ores form a niche market, with specialty smelters used to recover the iron, titanium and vanadium. These ores are beneficiated essentially similar to banded iron formation ores, but usually are more easily upgraded via crushing and screening. The typical titanomagnetite concentrate grades 57% Fe, 12% Ti and 0.5% V2O5.


Hematite ore
Hematite iron ore deposits are currently exploited on all continents, with the largest intensity in South America, Australia and Asia. Most large hematite iron ore deposits are sourced from altered banded iron formations and rarely igneous accumulations.
Hematite iron is typically rarer than magnetite bearing BIF or other rocks which form its main source or protolith rock, but it is considerably cheaper to process as it generally does not require beneficiation due to its higher iron content. However, Hematite ores are harder than magnetite ores and therefore require considerably more energy to crush and grind if benefication is required. Hematite ores can also contain significantly higher concentrations of penalty elements, typically being higher in phosphorus, water content (especially pisolite sedimentary accumulations) and aluminium (clays within pisolites). Export grade Hematite ores are generally in the 62–64% Fe range.
Production and consumption
Iron is the world's most commonly used metal - steel, of which iron ore is the key ingredient, represents almost 95% of all metal used per year.[2] It is used primarily in structural engineering applications and in maritime purposes, automobiles, and general industrial applications (machinery).
Iron-rich rocks are common worldwide, but ore-grade commercial mining operations are dominated by the countries listed in the table aside. The major constraint to economics for iron ore deposits is not necessarily the grade or size of the deposits, because it is not particularly hard to geologically prove enough tonnage of the rocks exist. The main constraint is the position of the iron ore relative to market, the cost of rail infrastructure to get it to market and the energy cost required to do so.
Mining iron ore is a high volume low margin business, as the value of iron is significantly lower than base metals. It is highly capital intensive, and requires significant investment in infrastructure such as rail in order to transport the ore from the mine to a freight ship. For these reasons, iron ore production is concentrated in the hands a few major players.
World production averages two billion metric tons of raw ore annually. The world's largest producer of iron ore is the Brazilian mining corporation Vale, followed by Anglo-Australian companies BHP Billiton and Rio Tinto Group. A further Australian supplier, Fortescue Metals Group Ltd has helped bring Australia's production to second in the world.
The seaborne trade in iron ore, that is, iron ore to be shipped to other countries, was 849m tonnes in 2004.[6] Australia and Brazil dominate the seaborne trade, with 72% of the market.[6] BHP, Rio and Vale control 66% of this market between them.
In Australia iron ore is won from three main sources: pisolite "channel iron deposit" ore derived by mechanical erosion of primary banded-iron formations and accumulated in alluvial channels such as at Pannawonica, Western Australia; and the dominant metasomatically-altered banded iron formation related ores such as at Newman, the Chichester Range, the Hamersley Range and Koolyanobbing, Western Australia. Other types of ore are coming to the fore recently, such as oxidised ferruginous hardcaps, for instance laterite iron ore deposits near Lake Argyle in Western Australia.
The total recoverable reserves of iron ore in India are about 9,602 million tones of hematite and 3,408 million tones of magnetite[citation needed]. Madhya Pradesh, Karnataka, Bihar, Orissa, Goa, Maharashtra, Andhra Pradesh, Kerala, Rajasthan and Tamil Nadu are the principal Indian producers of iron ore.
World consumption of iron ore grows 10% per annum[citation needed] on average with the main consumers being China, Japan, Korea, the United States and the European Union.
China is currently the largest consumer of iron ore, which translates to be the world's largest steel producing country. It is also the largest importer, buying 52% of the seaborne trade in iron ore in 2004. China is followed by Japan and Korea, which consume a significant amount of raw iron ore and metallurgical coal. In 2006, China produced 588 million tons of iron ore, with an annual growth of 38%.


Iron ore market
Over the last 40 years, iron ore prices have been decided in closed-door negotiations between the small handful of miners and steelmakers which dominate both spot and contract markets. Traditionally, the first deal reached between these two groups sets a benchmark to be followed by the rest of the industry.
This benchmark system has however in recent years begun to break down, with participants along both demand and supply chains calling for a shift to short term pricing. Given that most other commodities already have a mature market-based pricing system, it is natural for iron ore to follow suit. Although exchange-cleared iron ore swap contracts have developed over the past few years, to-date no exchange has established a proper futures market for the largely seaborne $88 billion a year iron ore trade. To answer increasing market demands for more transparent pricing, the pan-Asian multi-product commodity and currency derivatives exchange for global trade Singapore Mercantile Exchange (SMX) is planning to launch soon an iron ore futures contract, subject to regulatory approval from the Monetary Authority of Singapore, based on the Metal Bulletin Iron Ore Index (MBIOI) which utilizes daily price data from a broad spectrum of industry participants and independent Chinese steel consultancy and data provider Shanghai Steelhome's widespread contact base of steel producers and iron ore traders across China.
This move follows a switch to index-based quarterly pricing by the world's three largest iron ore miners - Vale, Rio Tinto and BHP Billiton - in early 2010, breaking a the 40 year tradition of benchmark annual pricing.