Iron ore could surge upon China’s return

Original article by Timothy Moore
The Australian Financial Review – Page: 21 : 11-Feb-19

March iron ore futures closed 3.1 per cent higher at $US92 a tonne in Singapore on 8 February. Capital Economics says the spot price of iron ore could rally on 11 February, when Chinese traders return to the market following the Lunar New Year break. The tailings dam disaster in Brazil in late January may also impact on the iron ore price. Shares in BHP, Rio Tinto and Fortescue Metals Group have rallied in the wake of the disaster, although Vale’s share price has slumped.

CORPORATES
CAPITAL ECONOMICS LIMITED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, TD SECURITIES, OXFORD ECONOMICS LIMITED, MACQUARIE WEALTH MANAGEMENT, ARCELOR MITTAL SA, CITIGROUP INCORPORATED, FASTMARKETS MB

Rio debt upgrade as iron ore rises

Original article by James Thomson
The Australian Financial Review – Page: 22 : 8-Feb-19

Moody’s Investors Service has upgraded its rating on Rio Tinto’s debt from A3 to A2. The credit ratings agency has noted that Rio Tinto is better-placed to ride out periods of increased volatility in commodity prices as a result of its debt reduction strategy. The resources giant has slashed its debt from US28.5bn in 2013 to just $US12.5bn. Meanwhile, the iron ore price has risen to almost $US90 per tonne in the wake of the latest tailings dam disaster in Brazil, and some analysts say it could test $US100.

CORPORATES
RIO TINTO LIMITED – ASX RIO, MOODY’S INVESTORS SERVICE INCORPORATED, VALE SA

Brazilian closures test iron restraint

Original article by Paul Garvey
The Australian – Page: 27 : 7-Feb-19

UBS analysts are among those to have forecast an iron ore surplus in 2019. However, this is in doubt after a Brazilian court ordered Vale to put production at its Brucutu iron ore mine on hold in the wake of the tailings dam disaster at its Feijao mine. Vale has responded by declaring force majeure over its iron ore shipments. Vivek Dhar of the Commonwealth Bank says the iron ore price could potentially rise above $US100 per tonne following the production halt at Brucutu, whose annual output is 30 million tonnes.

CORPORATES
VALE SA, UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Miners soar as gold and iron ore prices rise

Original article by Paul Garvey
The Australian – Page: 24 : 6-Feb-19

Peter O’Connor of Shaw & Partners notes that Australian mining stocks have gained 17 per cent since 20 December. Shares in Fortescue Metals Group, BHP and Rio Tinto rallied on 5 February, after the spot price of iron ore for delivery to the port of Qingdao in China rose above $US81 per tonne. Analysts note that the market’s response to the latest iron ore tailings dam disaster in Brazil has been markedly different to the Samarco tragedy in 2015, when commodity prices had already been retreating.

CORPORATES
SHAW AND PARTNERS LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ARGONAUT SECURITIES PTY LTD

Iron ore surge predicted to be temporary

Original article by Timothy Moore
The Australian Financial Review – Page: 23 : 4-Feb-19

The spot price of iron ore rose above $US85 per tonne in the wake of the latest tailings dam disaster in Brazil. Goldman Sachs and Fitch Ratings are among the firms that have upgraded their iron ore price forecasts, and Capital Economics has suggested that it could peak at around $US100 per tonne. Meanwhile, Liberum Research still expects the iron ore price to retreat to $US50/tonne in 2019 and around $US40/tonne in 2020.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, FITCH RATINGS LIMITED, CAPITAL ECONOMICS LIMITED, LIBERUM RESEARCH, VALE SA, FASTMARKETS MB

China demand to drive earnings: Fortescue

Original article by Perry Williams
The Australian – Page: 24 : 1-Feb-19

Fortescue Metals Group has advised that its iron ore shipments for the December 2018 quarter totalled 42.5 million tonnes, an increase of five per cent year-on-year. The result included its first shipments of the higher-grade West Pilbara Fines. Meanwhile, Fortescue expects its earnings to be boosted by renewed demand for lower-grade iron ore among Chinese steel mills. The pure-play miner also says it is too soon to determine the likely impact of the latest tailings dam collapse in Brazil on the iron ore price.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA

Dam disaster fuels surge in iron ore price

Original article by Perry Williams
The Australian – Page: 17 & 20 : 31-Jan-19

Goldman Sachs has upgraded its 2019 forecast for iron ore after the price of the steel input rose 4.4 per cent to $US78.50 ($109) a tonne in response to another tailings dam disaster in Brazil. Goldman Sachs now has a price forecast of $US65 per tonne, compared with $US60 previously. The federal government’s mid-year budget update had forecast that the iron ore price would average $US55 per tonne in 2019. Vale has indicated that its annual iron ore production could be cut by up to 40 million tonnes due to the dam collapse. This would equate to about 10 per cent of its annual output.

CORPORATES
VALE SA, THE GOLDMAN SACHS GROUP INCORPORATED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SHAW AND PARTNERS LIMITED, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, MACQUARIE GROUP LIMITED – ASX MQG, TUV SUD

No New Year’s cheer for iron ore: analysts

Original article by Timothy Moore
The Australian Financial Review – Page: 22 : 3-Dec-18

Data from Fastmarkets MB shows that the spot price for iron ore with 62 per cent iron content was trading at $US65.95 a tonne at the end of November, having peaked at a month-high of $US77.2/tonne on 9 November. Analysts from Liberum Capital are bearish about the outlook for iron ore, forecasting that falling Chinese steel mill profits will reduce demand for higher-grade ore. Liberum has also changed its recommendation on shares in Rio Tinto, BHP Group and Anglo American to "sell".

CORPORATES
FASTMARKETS MB, LIBERUM CAPITAL LIMITED, RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP, ANGLO AMERICAN PLC, CAPITAL ECONOMICS LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, MACQUARIE CAPITAL PTY LTD, WEALTH WITHIN PTY LTD

Relief looms for lower-grade ore miners

Original article by Peter Ker
The Australian Financial Review – Page: 18 : 30-Oct-18

The price of benchmark iron ore with 62 per cent iron content has risen to its highest level for eight months in late October. Macquarie attributes the recent rally to factors such as an increase in Chinese steel production ahead of government-mandated winter cutbacks and growing demand for lower-grade iron ore amid falling margins. Macquarie notes that stockpiles of lower-grade Australian ore have fallen in recent weeks. Meanwhile, the discount for lower-grade ore is expected to narrow, which will benefit companies such as Fortescue Metals Group and Mineral Resources.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, MINERAL RESOURCES LIMITED – ASX MIN, MACQUARIE GROUP LIMITED – ASX MQG, JP MORGAN AUSTRALIA LIMITED, BCI MINERALS LIMITED – ASX BCI, CLEVELAND-CLIFFS INCORPORATED, ATLAS IRON LIMITED – ASX AGO, BROCKMAN MINING LIMITED – ASX BCK

How a $US1 move is making millions for Australian miners

Original article by Stephen Bartholomeusz
The Age – Page: 21 : 11-Oct-18

A rally in the price of iron ore, crude oil and metallurgical coal in the last month has in turn sparked a rise in the share prices of BHP Billiton and Rio Tinto. It is estimated that BHP’s EBITDA rises or falls by about $US227m for every $US1 movement in the iron ore price. The steel input is currently trading above $US70 per tonne, compared with BHP’s average realised price of $US56.71/tonne in 2017-18. Likewise, every $US1 per barrel change in the price of crude oil has a $US43m impact on BHP’s EBITDA.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, FORTESCUE METALS GROUP LIMITED – ASX FMG, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT