A perfect storm is brewing for Australia’s iron ore miners

Original article by Stephen Bartholomeusz
The Age – Page: Online : 20-Aug-21

A convergence of "China-centric" developments have seen the price of iron ore fall by over 30 per cent since its May peak, and some will have long-term impacts on demand for Australia’s most valuable export commodity. One of these developments is China’s commitment to achieve a peak in its carbon emissions by 2030 and to be net zero by 2060. China’s steel industry accounts for 13 per cent of its emissions, so this is one of the main areas of its focus, while it is also seeking to source new supplies of iron ore.

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Records roll on China iron ore sales

Original article by Ronald Mizen
The Australian Financial Review – Page: 10 : 23-Jul-21

New figures show that Australia’s iron ore shipments to China rose by $1.1bn to $14.8bn in June, despite the ongoing trade tensions between the two countries. Australia exported some $17.6bn worth of the steel input during June, with China accounting for about 85 per cent of this total. The Australian Bureau of Statistics notes that the iron ore price rose by five per cent during the month. Meanwhile, Australia’s overall exports grew by $2.8bn in June, to $41.2bn; the nation’s goods trade surplus was steady at a record $13.2bn.

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AUSTRALIAN BUREAU OF STATISTICS

Australia’s iron ore miners cashing in

Original article by Shane Wright
The Age – Page: Online : 21-Dec-20

The federal Department of Industry has revised its export earnings forecasts in response to a surge in the iron ore price. It had forecast in September that the nation’s iron ore producers would boast sales of about $97bn in 2020-21, but this has now been upgraded to $123bn. The forecast for iron ore sales in 2021-22 has in turn been upgraded from $80bn to $95bn. However, thermal coal exports are expected to be lower in 2020-21 due to China’s restrictions on imports from Australia. Meanwhile, the nation’s overall resources and energy exports are now expected to total $278.7bn in 2020-21; this is $22.3bn higher than was forecast in September, but $11.9bn lower than in 2019-20.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Canavan calls for retaliatory levy on iron ore to China

Original article by Ben Packham
The Australian – Page: 6 : 14-Dec-20

Former resources minister Matt Canavan contends that the federal government should respond to China’s import bans and punitive tariffs by imposing a levy on iron ore exports. Australia ships nearly 900 million tonnes of iron ore to China each year, and Canavan argues that a levy of just one per cent would raise more than $800m annually; this could be used to compensate companies that have been hit by China’s trade sanctions. Canavan notes that iron ore has not been affected by the trade war, as China cannot quickly and easily source an alternative supply.

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Resource exports face $40bn hit

Original article by Jared Lynch
The Australian – Page: 13 & 16 : 28-Sep-20

Australia’s resources and energy exports rose to a record $290bn in 2019-20, driven by a rally in the iron ore price. However, the Department of Industry’s latest Resources and Energy Quarterly report forecasts that the nation will export just $256bn worth of commodities in 2020-21. The total value of resources and energy exports in 2021-22 is forecast to be $252bn. The Department expects a pullback in the iron ore price to around $US85 a tonne by the end of 2020-21; iron ore shipments are expected to fall to $80bn, after reaching a record $102bn in 2019-20. Meanwhile, gold export earnings are forecast to reach a record $31bn in 2020-21.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Rift no barrier to China iron ore demand

Original article by Michael Smith
The Australian Financial Review – Page: 11 : 15-Jul-20

China has reported that its iron ore imports rose by 35.3 per cent year-on-year in June, following 3.9 per cent growth in May. The customs figures also show that the nation’s iron ore imports rose by 9.6 per cent to 547 million tonnes in the first six months of 2020. Xu Xiangchun of MySteel expects demand for iron ore to remain strong in coming months, but not at the same pace as June. China’s imports of Australian iron ore have not been impacted by growing tensions between the two nations.

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CHINA. GENERAL ADMINISTRATION OF CUSTOMS, MYSTEEL.COM LIMITED

Iron ore exports to China at risk

Original article by Michael Smith
The Australian Financial Review – Page: 14 : 26-Jun-20

Chinese research firm MySteel states that China’s demand for steel fell by between five and six per cent in the first half of 2020, but should improve in coming months with more infrastructure projects being initiated. MySteel’s chief information officer Xu Xiangchun says Chinese steel mills might look to alternative sources for iron ore if there is a perception among the Chinese public that Australia is ‘difficult’, while China Metallurgical Industry Planning and Research Institute president Li Xinchuang says it is important that China diversifies its iron ore supplies.

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MYSTEEL.COM LIMITED, CHINA METALLURGICAL INDUSTRY PLANNING AND RESEARCH INSTITUTE

‘Gushing cash’: iron ore miners a yield hunter favourite

Original article by William McInnes
The Australian Financial Review – Page: 29 : 24-Jun-20

The price of iron ore has risen by nearly 40 per cent since the start of 2020, and it peaked at more than $US100 a tonne in May amid supply disruptions in Brazil. Dion Hershan of Yarra Capital Management and Peter Gardner of Plato Investment Management are both bullish about BHP, Rio Tinto and Fortescue Metals Group. They cite factors such as the major iron ore producers’ strong cash flows and high dividend yields. However, Romano Sala Tenna of Katana Asset Management says they do not offer compelling value, although he says the sector is still appealing compared with the rest of the market.

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BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, YARRA CAPITAL MANAGEMENT, PLATO INVESTMENT MANAGEMENT LIMITED, KATANA ASSET MANAGEMENT LIMITED

Australia relaxed over China’s changes to iron ore export rules, but war of words goes on

Original article by Ben Doherty
The Guardian Australia – Page: Online : 22-May-20

BHP and Fortescue Metals Group have welcomed China’s decision to relax its inspection rules for iron ore shipments. From 1 June, customs officials will only inspect batches of iron ore if this is requested by the importer or trader; all shipments were previously subject to mandatory inspection on arrival in China. Minerals Council of Australia CEO Tania Constable says the new customs procedures recognise the high quality of Australian iron ore. However, the Chinese media has warned that growing trade tensions could potentially hit Australia’s iron ore exports. Australia supplies 62 per cent of China’s iron ore.

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BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, MINERALS COUNCIL OF AUSTRALIA

Beijing options limited to Australian iron ore

Original article by Elouise Fowler
The Australian Financial Review – Page: 7 : 15-May-20

China imported 62 per cent of its iron ore from Australia in 2019, compared to only 21 per cent from Brazil. However, a report in a state-owned Chinese newspaper has raised the possibility that China could replace iron ore from Australia with iron ore from Brazil as part of the growing trade tensions. However, Glyn Lawcock of UBS notes that the global iron ore market is very tight at the moment. Fortescue Metals Group CEO Elizabeth Gaines expects Chinese demand for Australian iron ore to continue to rise.

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UBS HOLDINGS PTY LTD, FORTESCUE METALS GROUP LIMITED – ASX FMG