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.

CORPORATES

BHP joins Baowu to explore green steel

Original article by Jared Lynch
The Australian – Page: 16 : 9-Nov-20

BHP will work with Chinese steel producer Baowu to develop low-carbon technologies for the global steel industry. BHP’s memorandum of understanding with Baowu includes provision for an investment of up to $US35m ($48m) in technologies aimed at reducing the industry’s carbon emissions. However, BHP still expects coking coal to remain a key steel-making input for many years. Coking coal accounted for $US1.9bn of BHP’s earnings in 2019-20.

CORPORATES
BHP GROUP LIMITED – ASX BHP, CHINA BAOWU STEEL GROUP CORPORATION 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.

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

China unlikely to target iron ore in virus blame game

Original article by Sarah Turner
The Australian Financial Review – Page: 27 : 13-May-20

Commonwealth Bank commodity strategist Vivek Dhar does not expect China to reduce imports of Australian iron ore despite the growing trade tensions between the two nations. He contends that China is too reliant on iron ore from Australia, noting that 85 per cent of its iron ore imports are sourced from Australia. Dhar adds that exports of commodities such as coal are at greater risk, as they can be sourced more easily from other countries. Analysts also expect any economic stimulus measures in China to boost demand for steel, and therefore iron ore.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Full steel ahead for Fortescue as China draws down ore stockpiles

Original article by Brad Thompson
The Australian Financial Review – Page: 21 : 6-May-20

Fortescue Metals Group CEO Elizabeth Gaines expects demand for iron ore to remain strong due to China’s urbanisation policy. China produced 234.5 million tonnes of crude steel in the March quarter, which is 1.2 per cent higher than the same period in 2019. Gaines says that any additional economic stimulus in China would further boost demand for steel, and therefore iron ore. Meanwhile, Gaines is confident that Fortescue’s application to increase its export capacity at Port Hedland by 20 per cent will be approved.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG

China steel stockpiles a worrying sign

Original article by Simon Evans, Peter Ker
The Australian Financial Review – Page: 16 : 3-Mar-20

There are reports of growing stockpiles of steel in China, which accounts for around half of the world’s production. Stockpiles have increased because construction companies and other steel users in China have been in partial shutdown due to the coronavirus, and the growing stockpiles have sparked concern of a knock-on effect to Australian iron ore miners such as Fortescue Metals Group and BHP. However, Fortescue CEO Elizabeth Gaines says the coronavirus has not impacted on its shipping schedule at this stage, while she notes that Chinese steel mills are still operating.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, BLUESCOPE STEEL LIMITED – ASX BSL

Miners tipping China’s winter halts to ease

Original article by Peter Ker, Brad Thompson, Mike Smith
The Australian Financial Review – Page: 15 & 20 : 28-Oct-19

Fortescue Metals Group COO Greg Lilleyman says China’s annual winter shutdown of industries such as steel-making is likely to have less impact on commodity prices than in recent years. He adds that it is hard to predict the extent of the shutdowns, given that much of the responsibility for implementing the policy to improve air quality has been delegated to provincial governments. South32 CEO Graham Kerr says that some winter production cuts are likely, but he adds that China is also likely to prioritise economic growth.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SOUTH32 LIMITED – ASX S32, WOOD MACKENZIE

Iron ore prices to remain high

Original article by Nick Evans
The Australian – Page: 20 : 9-Jul-19

The price of iron ore for delivery to China firmed on 8 July, after falling sharply in the previous week in response to calls for Chinese government intervention. Meanwhile, Ord Minnett expects the benchmark price of iron ore to remain high for the remainder of 2019, before averaging $US87 per tonne in 2020. The firm also notes that an increase in steel production has seen iron ore stockpiles at Chinese ports decline for 12 consecutive weeks. Ord Minnett has increased its Chinese steel production forecast for 2019 by seven per cent year-on-year, to 992 million tonnes.

CORPORATES
ORD MINNETT GROUP LIMITED, CHINA IRON AND STEEL ASSOCIATION, CHINA. NATIONAL DEVELOPMENT AND REFORM COMMISSION, VALE SA, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

China: iron ore import prices too high

Original article by Michael Smith
The Australian Financial Review – Page: 13 & 16 : 8-Jul-19

The price of iron ore for delivery to China recently peaked at $US126 per tonne. However, the iron ore price retreated on 5 July after the Chinese government indicated that it could intervene after the nation’s steel mills claimed that futures traders are manipulating the iron ore market. The China Iron & Steel Association’s vice-president Qu Xiuli is said to have indicated that the government intends to address ‘irregularities’ that have been identified by the nation’s steel makers. The reports prompted a sharp fall in the share prices of BHP and Rio Tinto.

CORPORATES
CHINA IRON AND STEEL ASSOCIATION, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, MYSTEEL.COM LIMITED, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

Fortescue expects China’s ore demand to stay strong

Original article by Michael Smith
The Australian Financial Review – Page: 17 & 20 : 29-Mar-19

Fortescue Metals Group CEO Elizabeth Gaines says there are no indications that Chinese steel production is contracting. She adds that the general consensus of Fortescue’s iron ore customers in China is that growth in steel output will to slow to 3-4 per cent in 2019. This follows 12 per cent growth in 2018. Gaines has also indicated that China’s move to restrict Australian coal imports has had no impact on Fortescue’s iron ore shipments. The pure-play miner has resumed shipments from Port Hedland in the wake of Cyclone Veronica.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BOAO FORUM FOR ASIA, SHANGHAI BAOSTEEL GROUP CORPORATION, FORMOSA GROUP, VALE SA