Följ oss

Nyheter

David Hargreaves on Iron ore, week 14 2012

Publicerat

den

Trucks in iron ore mineIron Ore continues to dominate news in the bulk trade, as befits a mineral whose output is measured at over one billion tonnes per year and growing at over 6% annually. That alone is the combined exports of Canada and South Africa.

Of greatest importance is that as an export-driven trade, critical to producers such as Australia, Brazil, India and the CIS. Further, almost 60% of all is destined for China and 20% for Japan and South Korea. The market is effectively polarised.

Contract pricing ruled for many years in annual bargains driven by the above importers and the major producing companies Vale SA (24% world production), Rio Tinto (14%) and BHPB (10%). Now it has all but broken down and been replaced by reference to the spot market. The growth of that mechanism owes much to the development of diversified production bases in West Africa and continued growth in the established mining locations. Much has been made of the possible economic slowdown in China. In context, this means that last year’s 9.3% increase may only be 8% this year. That is still another 80Mtpy. There are warnings of the spot price softening but this has not been borne out. It further nudged up to $145.2/t thisweek even as new investment and output news flows in. Increasingly, users are investing in mines to secure supplies.

  • Japanese trader Marubeni is teaming up with South Korea’s steel maker Posco and ship builder STX to buy 30% of the Roy Hill project in Australia, whose plan is to hit 55Mtpy by 2014. That works out at about $220/t of output or 1.50 x the sales price.
  • AIM listed but with loftier ambitions, London Mining (285p; Hi-Lo 438p-256p) is now fully funded to boost capacity at its Marampa, Sierra Leone mine to 5Mtpy. It has an offtake agreement with trading company Vitol. It also has an offtake contract with Glencore. Both have prepayment clauses. There is a further target of 9Mtpy.

Iron ore pricing. Wood MacKenzie sees iron ore supply and demand coming into balance over the next few years and the price slowly to decline. Their range is $157/t in 2012, $155/t in 2013 and $140/t in 2014. They warn of projects in the riskier and less developed regions suffering. Demand growth in China is pitched at 5% per year. They look for coking coal, essential to steel making, to average $200-215/t in the next few years.

Chrome Ore. A much misunderstood metal, its major end use is as ferro-chrome for use in steel making, particularly the stainless variety. This is achieved by mixing the ore with iron and coke, a relatively expensive process but with a resultant price enhancement. Resources are not a problem, measuring over 300 years at present rates of usage. However they lie selectively in RSA (70%) Russia and CIS (10%) and Zimbabwe (10%). South Africa has long been the dominant producer, but its share of supply as ferro-chrome (as opposed to chrome ore) has slipped from 50% in 2001 to 42% now, with China’s share up in the same period from 5% to 25%. Much of China’s output arises from raw ore shipped from RSA. This has been noticed in high places. They tell us the industry employs 200,000 people and its exports are worth R42bn to GDP. So there is a call to slap a duty of $100/t on raw chrome exports, to encourage local beneficiation. Problem: it is energy intensive and to show the comic-tragic nature of the situation, even as the call went out for the export tax, at least one ferrochrome producer was cutting back on its electricity usage at the behest of power generator Eskom. You can’t have your pasties and eat them, chaps

Annons

Gratis uppdateringar om råvarumarknaden

*

Iron ore CFR Tianjin port 2011

[hr]

About David Hargreaves

David Hargreaves

David Hargreaves

David Hargreaves is a mining engineer with over forty years of senior experience in the industry. After qualifying in coal mining he worked in the iron ore mines of Quebec and Northwest Ontario before diversifying into other bulk minerals including bauxite. He was Head of Research for stockbrokers James Capel in London from 1974 to 1977 and voted Mining Analyst of the year on three successive occasions.

Since forming his own metals broking and research company in 1977, he has successfully promoted and been a director of several public companies. He currently writes “The Week in Mining”, an incisive review of world mining events, for stockbrokers WH Ireland. David’s research pays particular attention to steel via the iron ore and coal supply industries. He is a Chartered Mining Engineer, Fellow of the Geological Society and the Institute of Mining, Minerals and Materials, and a Member of the Royal Institution. His textbook, “The World Index of Resources and Population” accurately predicted the exponential rise in demand for steel industry products.

Annons

Gratis uppdateringar om råvarumarknaden

*
Fortsätt läsa
Annons Centaur
Klicka för att kommentera

Skriv ett svar

Din e-postadress kommer inte publiceras. Obligatoriska fält är märkta *

Nyheter

Vetepriset kommer att gå upp – hur man än vrider och vänder på det

Publicerat

den

Vete i närbild

Priset på vete har halverats på två, samtidigt sjunker vetelagren. Torbjörn Iwarson på Centaur Commodity Fund säger i DiTV att priset måste upp för att motivera bönder att odla mer. Han konstaterar att hur man än vrider och vänder på det så måste priset gå upp för världen kan inte vara utan vete.

Torbjörn Iwarson kommenterar vete och apelsinjuice.
Fortsätt läsa

Nyheter

Bra start för Centaur Commodity Fund

Publicerat

den

Tre olika råvaror

Centaur Commodity Fund är den nya råvarufonden i Sverige som förvaltas av den erfarna råvaruprofilen Torbjörn Iwarson. Fonden har en bred exponering mot råvarumarknaden och mäter sig mot det etablerade indexet Bloomberg Commodity Ex Energy Total Return Index.

Fonden har fått en bra start och presterade bäst jämfört med sina närmaste konkurrenter. Förvaltaren skriver på LinkedIn med glimten i ögat ”Nybörjartur med råvarufonden.” En fond ska självklart utvärderas över längre tid, inte en enskild månad, men det måste ändå vara trevligt att börja med att vara bäst.

Fortsätt läsa

Nyheter

Vinregionen Champagne drabbad av hagelstorm

Publicerat

den

Hagelskadad vinodling i Champagne

Den 12 maj bröt våldsamma hagelstormar ut i vid Champagnes vingårdar i Frankrike. Särskilt drabbat är området Vitry-le François där odlare har fått mellan 50-100 procent av sina odlingar förstörda.

Vingårdarna i södra Aisne hade 70-100 mm regn och stora översvämningar.  Svåra hagelskador drabbade regionerna Courcelles, Barzy-sur-Marne, Passy-sur-Marne och Trélou-sur-Marne som hade hagelstormar som varade i hela 45 minuter.

– Det är väldigt ovanligt att en enda storm drabbar ett sådant stort område. Detta är givetvis en stor katastrof för odlarnas ekonomi, deras familjer och anställda.  För odlare som säljer sin skörd är detta ofta den enda inkomstkällan. Medan odlare och producenter som skapar sin egen champagne oftast kan fylla ut med reserv-vin som man sparar tillbaka från bättre skördeår, säger Fredrik Schelin, vinexpert i Sverige.

Annons

Gratis uppdateringar om råvarumarknaden

*

– Vi har inget hagel just nu men vi har det besvärligt med vädret just nu. Massor av regn, och möglet har redan satt sina spår. Det är svårt för oss att arbeta med jorden, men förhoppningsvis blir det bättre till sommaren, säger Jean-Paul Hébrart, Champagne Marc Hébrart – Mareuil sur AŸ.

Det är svårt att bedöma de övergripande skadorna av stormen. Mellan 450-500 hektar vinstockar, det vill säga ca 1,4 procent av hela Champagnes vinodlingar har drabbats i varierande grad, från 50 till 100%. Fram till skörden är Champagne-regionen fortsatt utsatt för risk för hagel och storm.

Isabelle Diebolt från Champagne Diebolt-Vallois – Cramant rapporterar:
– Vi har inget hagel, men oändligt mycket regn, så det är svårt att odla och jobba med vin just nu.

Annons

Gratis uppdateringar om råvarumarknaden

*
Fortsätt läsa

Centaur

Guldcentralen

Fokus

Annons

Gratis uppdateringar om råvarumarknaden

*

Populära