Resurgent global steel production supports iron ore

In its quarterly review, RCR reported that fiscal stimulus of the steel sector has succeeded and the recovery in iron ore demand, which began late in the second quarter of 2009, in ongoing and should continue to support a long-term recovery in prices
“This is especially true of China, which in a large part has been responsible for driving the recovery, via stimulus-driven steel production and iron ore stockpiling. Also, prices have been supported by global iron ore production cuts in the fourth quarter of 2008 and into the first quarter of 2009,” said RCR’s iron ore analyst, Trent Allen.
“The fast recovery has created some downside risk for iron ore, in the short to medium term. For example, an end to stockpiling and a move to reduce overcapacity in the Chinese steel sector could affect demand for iron ore and cause a fall in the spot price. However, global steel production has returned almost to pre-GFC levels and the long-term outlook for iron ore is strong.”
Chinese iron ore market statistics reflect the recovery. The import spot price rose 25 per cent in the last three months of last year to US$104.2/t. The internal spot price (CNY860 or ~US$125.5/t) rose 10.1 per cent in the same period, to levels similar to those seen in 2007, before the 2008 price surge. It is still 46.6 per cent below its March 2008 high of CNY1610 (~US$234.8/t). Imports for October to December were up 34.4 per cent, year-on-year but had fallen 16 per cent in December, while inventory levels and output had remained flat, consistent with a seasonal slowdown.

To read the full report see the Jan/Feb edition of The Australian Journal of Mining, being published on February 9th. To register for a free trial copy click here.

In other iron ore news…

Environmental go-ahead for Albany port expansion
By Sineva Toevai
Grange Resources has been given environmental clearance by the Western Australian Environmental Protection Authority to proceed with the expansion project at the port of Albany.
Grange Resources and Albany Port Authority plan to build a new berth at the port and widen and deepen the entrance channel.
"The project will allow the port to cater for capesize vessels, supporting the proposed export of iron ore concentrate from Grange’s Southdown iron ore mine," the company said in a statement.
"The use of larger capesize vessels will contribute to shipping and operational efficiencies as well as reducing by two-thirds the number of shipping movements required in Albany Harbour compared to the current smaller vessels."
The EPA recommendation is subject to final approval by Western Australia’s environment minister.
"With environmental approval already in place for the mine site and pipeline to Albany together with the power transmission line to the Southdown mine site as well as the Malaysian Pellet plant site, ministerial approval will be the final major step necessary for the project to proceed," Grange said.

Langoulant to lead Oakajee Port & Rail
By Rob McKay
Western Australian business and public service stalwart John Langoulant has been appointed chief executive of Oakajee Port & Rail (OPR), its 50 per cent owner Murchison Metals said.
Langoulant was a former under-treasurer of WA for nine years and was head of the WA Chamber of Commerce and Industry for more than three years.
He will relinquish his current role as chief executive of Australian Capital Equity, the private investment firm owned by media tycoon Kerry Stokes.
Langoulant has also been a member of the Council of Australian Governments reform council and takes the reins from acting chief executive Alwyn Vorster, who took over after Chris Eves left the firm in December.
Murchison executive chairman Paul Kopejtka pointed to Langoulant's financial skills and experience with government as being valuable as the $4 billion OPR project "moves through the completion of the feasibility studies and locks in funding".

Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au

AJM’s13th Annual Global Iron Ore & Steel Forecast Conference
March 23-25, 2010 – Sheraton Perth Hotel, WA
The next instalment of the AJM’s premier iron ore and steel event will be held at the Sheraton Perth and promises to be the biggest event yet. More than 120 executives have already secured their seats at the must-attend event of the year which attracts the highest quality range of industry players and commentators to present their views and forecasts for the year ahead.
The conference will address key pricing issues, the development of the iron ore index, production rates, new projects, as well as the challenges of infrastructure building and skilling the workforce.
The program also includes a number of social and networking opportunities for delegates to choose from.
To book your place, or to enquire about The 13th Annual Global Iron Ore & Steel Forecast Conference, contact tel: +61 (0)2 9080 4307 or email registration@informa.com.au