Access to Raw Materials: Russia intents to limit scrap exports

Brussels -- The Bureau of International Recycling BIR and the European Ferrous Recycling federation EFR are very concerned by a recent development in Russia. BIR has been informed that the Russian Federal Customs Service intends to reduce the number of checkpoints for exports of ferrous and steel scrap from Russia. If this project were to be implemented, the free and fair access to a raw material that is indispensable for steel mills and scrap merchants worldwide would be heavily jeopardized.

Foto: Marc Weigert

The intention of the Russian Customs Service is to limit the number of checkpoints for sea transport to three, for rail transport to two and for road transport to five, in an effort to slow down scrap shipments outside Russia, thereby favouring the supply of their domestic demand.

The project foresees the suppression of checkpoints at the ports of Rostov-on-Don and St. Petersburg, which would cause serious problems for countries such as Greece, Sweden and Spain to be supplied with Russian scrap. Finland is also facing similar problems due to the potential closure of some railroad checkpoints.

“Russia’s technical barriers to scrap trade are not acceptable,” states Francis Veys, Director General of BIR and acting Executive Director of EFR. “This will increasingly restrict access to important raw materials, which are indispensible for the steel industry and scrap operators in the EU and worldwide.”

In 2007, iron and steel exports from Russia to EU 27 amounted to 2.178 million tonnes, whereas in 2010 exports dropped just under one million tonnes. Almost 50 percent of Russian scrap exports go to the Spanish market.

BIR strongly condemns the increasing trend towards protectionist measures regarding scrap movements, such as duties, taxes, quota and environmental barriers, which also represent a violation of WTO rules. EUROFER, the European association of the steel industry, has expressed similar concerns and requested DG Trade to urgently address this matter with the Russian authorities.

Quelle: Bureau of International Recycling BIR

Australia's Iron Ore Exports to Rise 5.5% in 2011, Government Bureau Says

Australia, the world’s largest iron ore exporter, will export 5.5 percent more of the steelmaking raw material this year as BHP Billiton Ltd. and Rio Tinto Group increase output, taking advantage of higher prices.

Australia may ship 425 million metric tons in 2011 and 462 million tons next year, the Canberra-based Australian Bureau of Agricultural and Resource Economics and Sciences said today in a report. The nation’s copper and nickel exports will also climb as global consumption increases.

Rio and BHP, the world’s second- and third-largest iron ore producers, are expanding mines in Australia to meet demand led by China. Global steel consumption may climb 6 percent this year to 1.4 billion tons and may reach 1.9 billion tons in 2016, the government-run bureau said.

“Growth in steel consumption in developing Asian economies will form the backbone of world steel demand growth, reflecting the development of infrastructure and rising incomes in these economies,” the bureau said in the report. “Prices for both iron ore and metallurgical coal are forecast to remain well above historical averages.”

Australia’s export earnings from iron ore may be 64 percent higher this fiscal year at A$57 billion ($57.9 billion), it said. That may gain to A$68 billion in the year ending June 30, 2016. Total sales from metals and minerals may gain 12 percent to A$125.8 billion this financial year.

Iron Ore Prices

Exports of iron ore are projected to increase at an average annual rate of 7 percent to 2016 to 599 million tons, the bureau said. By 2016, Australian exports are projected to account for 43 percent of world trade, it said. Exports may rise to 599 million tons by 2016.

Brazil, the world’s second-largest producer, may ship 332 million tons this year, an increase of 7.8 percent, rising to 436 million tons in 2016.

Iron ore prices may average $149 a ton this year, compared with $112 a ton in 2010, it said. Prices will decline as companies including BHP, Rio and Vale SA, the world’s largest producer, expand operations. Iron ore will average $93 a ton by 2016.

China, the world’s biggest producer of steel, is forecast to produce 671 million tons this calendar year, up 7 percent. The nation’s steel consumption is projected to increase by 8 percent a year to 995 million tons by 2016.

Iron ore prices weigh on steelmakers

BEIJING, Feb. 28 (UPI) -- Iron ore prices are expected to rise sharply in the second quarter of 2011 as demand for steel in China rises, a commodities analyst said.
Colin Hamilton, a commodities analyst at Macquarie, said this year promises to be "phenomenal for the miners," The Financial Times reported Monday.
With contract prices set on the last day of the month, Guilherme Cavalcanti, the chief financial officer of mining conglomerate Vale, said, "This is the greatest moment for the company so far but the best is yet to come."
"Expected price increases are anticipated to range between 10 percent up to 60 percent, in some cases, as new contracts for iron ore delivery are negotiated," Mine-Engineer.com reported on its Web site.
Contract prices for iron ore, based on average spot market prices from December to February, are expected to reach $170 per metric ton for Australian iron ore, about 40 percent higher than the same quarter of 2010, the Times reported.
In January, China imported a record 69 million metric tons of iron ore.
Adding to a potential escalation of steel prices, coking coal prices are expected to rise due to floods in Australia, which limited coking coal extraction.

Iron ore rally may resume with India's tax hike

India's move to raise iron ore export taxes to 20 percent will send a shockwave through the $100-billion seaborne market, and fuel another surge in spot prices to record levels as top buyer China rushes to book cargoes before the hike takes effect in April.
The fourfold jump in duty on iron ore fines -- sandy material that typically contains 55 to 65 percent iron -- will hit Chinese buyers, the main market for India's iron ore exports, particularly hard, and drive up prices from the top two suppliers, Australia and Brazil.
"If the Chinese start to panic and come back to the market, it could cause an issue," said Michael Gaylard, strategy director at Freight Investor Services in Shanghai.
"It could cause a further tightening in supply and a reversal of the current price downtrend."
Iron ore spot prices surged to record highs near $200 a tonne in mid-February as tight supplies from India, the world's No. 3 exporter of the steelmaking material, combined with seasonal buying by Chinese steel mills which are building inventory in anticipation of a pickup in demand.
But with real demand still wobbly, Chinese steel futures last week dropped from record levels, knocking down spot iron ore prices as Chinese purchases slowed.
India on Monday hiked the export duty on iron ore fines to 20 percent from 5 percent in a bid to conserve the raw material for its growing steel sector.
The government also raised the export tariff on iron ore lumps to 20 percent from 15 percent. The new rates take effect on April 1.
India last raised the export tax on iron ore lumps in April 2010 to 15 percent from 10 percent, after slapping a 5 percent export duty on iron ore fines in December 2009.
"This would mean 1,000 rupees extra cost for exporters, which could pinch shipments," said Dhruv Goel, managing partner at iron ore trader Steelmint in Orissa.

SURGING DEMAND
India's surging demand for iron ore, with low-quality grades making up about 70 percent of last year's output of 222 million tonnes, has driven miners to invest in pelletizing plants so as to be able to use the iron ore fines.
There are now very few pellet plants in India, but many more are expected to be built with steel giants ArcelorMittal and POSCO looking to expand in the country.
Pellets, made of lower grade powdery iron ore fines once thrown away, but now melted down to make higher grade nodules, are ideal for feeding blast furnaces in steel mills.
The world's largest fifth largest crude steel producer, India is aiming to lift output to 120 million tonnes by the end of 2012 from nearly 70 million tonnes in 2010.
A ban on exports from India's southern Karnataka state since July had already caused iron ore shipments to fall for a sixth straight month in December.
India's top iron ore producing state, Orissa, and another exporting state, Chhattisgarh, are also looking at banning exports.
The higher tax rates "will increase the floor price for Indian prices and if Indian prices increase then that will push prices to China higher," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.
But India's move may be aimed more at curbing illegal mining.
"If they are trying to stop illegal mining and make it much more costly to move that product, it's probably going to help to constrict supply and therefore get more of a handle on that fines market and some of the illegal trading that's going on in India," said FIS' Gaylard.
But the move means even higher costs for Chinese steel mills already reeling from a more than 40 percent jump in iron ore prices last year as the industry shifted to a more volatile quarterly pricing system from a decades-old annual scheme.
"Steel mills can't take more costlier raw materials at the moment as steel prices were heading downward recently on weak demand," said an iron ore official at a mid-sized Chinese steel mill with annual crude steel capacity of around 5 million tonnes.
But traders say India's move has yet to impact spot iron ore prices on Monday as players assess the impact of the policy move and with Chinese mills also likely to scour the market for other potential suppliers.
After Australia, Brazil and India, the next three biggest iron ore suppliers to China last year were South Africa, Iran and Ukraine, with Iran's exports surging the most at more than 100 percent.

Iron-ore prices ease on demand woes, Q2 contract seen at record

SHANGHAI/SINGAPORE – Spot iron-ore prices extended losses on Monday after slumping 5% from mid-February last week, with Chinese steelmakers expecting prices to fall further on demand uncertainties.

But the recent surge in prices to record highs is expected to lift second-quarter contract prices for the steelmaking ingredient up around 20% to an all-time high.

Platts' widely-used 62% iron-ore index has averaged $179,2/t, including freight, from December 1 to February 25 – the basis for the second-quarter contract – up 20% from $149,2 in the September-November period, on which the first-quarter contract was based on, according to Reuters calculations.

The contract price would be the highest since the industry shifted to a quarterly pricing system in April 2010, largely in line with a Reuters poll of analysts earlier this month.

Vale, the world's largest iron ore miner which has seen its profits soar since the decades-old annual pricing scheme was ditched last year, also said it expects second-quarter prices to jump by around 20%.

The rally that began at the start of 2011 faltered last week as spot prices fell 5% from February highs with demand from top buyer China slowing.

Indian ore with 63,5% iron content was quoted in China at $189/t to $191/t on Monday, including freight, down from $191 to $193 on Friday, said Chinese consultancy Mysteel.

"We can't tell how the market will go so far. Demand is weak and steel mills still don't want to buy unless steel prices rise strongly," said an iron ore trader in Shanghai.

SHANGHAI REBAR NEAR TWO-MONTH LOWS

The most active steel rebar contract for October delivery on the Shanghai Futures Exchange rose half a percent on Monday after falling more than 2% to near two-month lows last week on worries about weak steel demand from end-users.

The decline in Shanghai steel futures helped trigger a correction in iron-ore spot prices, sending key indexes lower. Platts' 62% benchmark fell $1,25 to $183,50/t, its lowest since January 17 and marking its seventh straight session of losses.

Metal Bulletin's 62% index dropped $1,72 to $181,86/t, and The Steel Index's 62% gauge was unchanged at 184,10, both hitting their lowest since January 19.

But prices of forward swaps rebounded sharply on Friday after recent declines, with the Singapore Exchange-cleared March contract surging 5% to $175,37/t and April up 4% to $164,25.

"We'll probably see a little bit of hesitancy today after such a big bounce on swap prices on Friday," said Danny Thompson, a broker at Freight Investor Services in Singapore.

"Whenever we see a big move like that market participants prefer to spend a little time digesting the move and trying to understand the implications and where we might go from here before doing anything too aggressive in the market.

"On the physical side of things unless the buyers step in, we should see prices continue to ease down as we go forward into this week."

Given the uncertainty on steel demand and prices, many Chinese steel mills expect iron ore prices to fall below $180/t in the near term, traders said.

Edited by: Reuters

Iron Ore-Prices ease on demand woes, Q2 contract seen at record

* Indian 63.5 pct ore offers fall $2 per tonne-Mysteel

* Prices may extend drop unless Chinese buyers return

* Q2 iron ore contract price seen up 20 pct

By Ruby Lian and Manolo Serapio Jr.

SHANGHAI/SINGAPORE, Feb 28 (Reuters) - Spot iron ore prices extended losses on Monday after slumping 5 percent from mid-February last week, with Chinese steelmakers expecting prices to fall further on demand uncertainties.

But the recent surge in prices to record highs is expected to lift second-quarter contract prices for the steelmaking ingredient up around 20 percent to an all-time high.

Platts' widely-used 62 percent iron ore index IODBZ00-PLT has averaged $179.2 per tonne, including freight, from Dec. 1 to Feb. 25 -- the basis for the second-quarter contract -- up 20 percent from $149.2 in the September-November period, on which the first-quarter contract was based on, according to Reuters calculations.

The contract price would be the highest since the industry shifted to a quarterly pricing system in April 2010, largely in line with a Reuters poll of analysts earlier this month.

Vale, the world's largest iron ore miner which has seen its profits soar since the decades-old annual pricing scheme was ditched last year, also said it expects second-quarter prices to jump by around 20 percent.

The rally that began at the start of 2011 faltered last week as spot prices fell 5 percent from February highs with demand from top buyer China slowing.

Indian ore with 63.5 percent iron content was quoted in China at $189-$191 per tonne on Monday, including freight, down from $191-193 on Friday, said Chinese consultancy Mysteel.

"We can't tell how the market will go so far. Demand is weak and steel mills still don't want to buy unless steel prices rise strongly," said an iron ore trader in Shanghai.

SHANGHAI REBAR NEAR 2-MONTH LOWS

The most active steel rebar contract for October delivery on the Shanghai Futures Exchange rose half a percent on Monday after falling more than 2 percent to near two-month lows last week on worries about weak steel demand from end-users.

The decline in Shanghai steel futures helped trigger a correction in iron ore spot prices, sending key indexes lower. Platts' 62 percent benchmark fell $1.25 to $183.50 per tonne, its lowest since Jan. 17 and marking its seventh straight session of losses.

Metal Bulletin's 62 percent index .IO62-CNO=MB dropped $1.72 to $181.86 a tonne, and The Steel Index's 62 percent gauge .IO62-CNI=SI was unchanged at 184.10, both hitting their lowest since Jan. 19.

But prices of forward swaps <0#SGXIOS:> rebounded sharply on Friday after recent declines, with the Singapore Exchange-cleared March contract surging 5 percent to $175.37 a tonne and April up 4 percent to $164.25.

"We'll probably see a little bit of hesitancy today after such a big bounce on swap prices on Friday," said Danny Thompson, a broker at Freight Investor Services in Singapore.

"Whenever we see a big move like that market participants prefer to spend a little time digesting the move and trying to understand the implications and where we might go from here before doing anything too aggressive in the market.   

"On the physical side of things unless the buyers step in, we should see prices continue to ease down as we go forward into this week."

Given the uncertainty on steel demand and prices, many Chinese steel mills expect iron ore prices to fall below $180 per tonne in the near term, traders said. (Reporting by Ruby Lian and Manolo Serapio Jr.; Editing by Ed Lane)

© Thomson Reuters 2011 All rights reserved

Spot iron ore prices to China fell for a fourth-straight session on Friday to a level last seen in late January, on concerns over slowing demand with steel mills expecting further declines.

The global steel demand has seen a growth in excess of 13% in the year 2010. The revival in the advanced economies and the consumption levels across all continents in the world is propelling the demand for steel worldwide.

JSW said “The Indian manufacturing growth remains positive driven by the demand from key consumption sectors such as infrastructure, automotive, consumer goods and housing, to name a few.”

It said “The demand for steel in India has seen a robust growth in excess of 9% to 10% over the year 2009-10. Rapid urbanization and spending on infrastructure within India is certain to drive steel demand and in the year 2011-12, it is estimated demand is likely to grow by 12% to 14%.”

It said “The international market also has seen a steady rise in steel demand and prices, and the global supply of finished steel also remains well balanced.”

It said “The deluge in the Australian coal mines coupled with low supplies of iron ore from India is resulting in a price volatility pushing up input raw material prices and compelling the steel manufacturers to increase steel prices.”

JSW concluded “Going forward, due to this cost push of the input raw materials, steel prices are likely to see further increase in the coming months.”

China: spot iron ore prices continue falling

Spot iron ore prices to China fell for a fourth-straight session on Friday to a level last seen in late January, on concerns over slowing demand with steel mills expecting further declines.

Indian ore with 63.5 percent iron content was quoted in China at $190-192 per tonne including freight on Friday, versus $191-$193 on Thursday, according to IronOreTeam website.

"The overall market is still under a bearish atmosphere. It is still too early to say when a turning point will come," said an iron ore trader in Shandong province.

Iron ore hit $200 per tonne in mid-February, the highest level since February 2008, but a lull in trading as steel mills held back on purchases has dragged down prices by almost 5 percent.

A few deals were concluded at below $190 per tonne including freight this week, as buying from top consumer China continued to wind down.

"I have not heard of China buying from many days, and even enquiries are less. I had no enquiries since 15-20 days, the last deal was done in the first week of January," said Somshri Patnaik, partner at PM Minerals, an iron ore trader in the eastern Indian state of Orissa.

Three global iron ore indexes also fell on Thursday, touching a more than one-month low, as the whole metals complex was saddled by worries that rallying oil prices due to the unrest in North Africa and Middle East will limit global growth.

Baosteel and Rio exchange ideas on iron ore pricing

China's Baosteel said on Feb 25 that it has exchanged ideas with Australia's major miner Rio Tinto on how to improve iron ore pricing, as part of efforts to strengthen cooperation.

Rio Tinto's iron ore head Sam Walsh paid a visit to Baosteel Chairman Xu Lejiang on Thursday, Baosteel said in a report on its website, but it did not provide more details on the meeting.

Baosteel traditionally leads other large domestic peers in the annual iron ore price negotiation with three global iron ore miners Rio Tinto, BHP Billiton and Vale.

However, miners decided to abandon the decades-old benchmark system in favour of an index-based quarterly pricing mechanism since 2009 after failing to reach an agreement with the China Iron & Steel Association (CISA).

The new scheme has forced Chinese steel mills to suffer volatile raw materials cost and low profitability. And analysts said China's intransigence in 2009 cost the country billions of dollars.

Medium- and large-sized steel mills saw profit growth of 2.91 percent last year, far lower from the average level for all industrial sectors, CISA said in its statement on Thursday.

Luo Bingsheng, a senior adviser to the association, also blamed miners raising prices without providing room for negotiation with Chinese steel mills, which harms the cooperation and relationship between two parties, local media reported on Wednesday.

"The negotiation is at a stalemate," Luo was quoted as saying.

Global pig iron output totals 87.14 million mt in January

According to the preliminary data released by the World Steel Association (worldsteel), global pig iron production in January this year totaled 87.14 million metric tons, increasing by 4.11 percent compared to December 2010 and by 1.52 percent year on year.

Of the countries observed, the largest production volume was recorded by China with 48.95 million output, followed by Japan with a 7.35 million mt output.

Pig Iron Prices of Kardemir (Turkey) updated

Update 23. Feb 2011

  

Pig Iron Prices (US$/mton)	EXW excluded VAT USD/mton
Hematite 1	600
Hematite 2	590-595
Hematite 2 high S%	580
Basic Iron 1	575
Basic Iron 2	565
Basic Iron 1, high S%	555
Basic Iron 2, high S%	545

Ukraine’s mills stop production on high domestic scrap price

Turkey’s scrap import market stays cold

Recently, Turkey’s scrap import market has stayed cold and the prices have remained flat.

It’s said that a Turkish steel mill imported 25 thousand tons of HMS scrap 1&2 (80:20) and 15 thousand tons of shredded scrap with the deal prices at US$448~US$453/ton CFR.

Industry sources indicated that as Turkey’s steel mills attempt to obtain the lower import prices, they’ve taken wait-and-see attitude and observe the market situation of the Middle East and the North Africa.

However, some said that as Turkey’s steel mills current inventory of scrap might only be used for 40~60 days, they believe that Turkey’s buyers would return to the market in March.

Iron Ore-Spot prices extend decline, swaps head lower

* Mysteel offers down 5 percent in late February

* Indexes retreat to more than one-month low

* Swaps extend losses, outlook uncertain

* Indian futures trade flat

(Updates rebar futures, adds India futures, traders' quotes)

By Ruby Lian and Siddesh Mayenkar

SHANGHAI/MUMBAI, Feb 25 (Reuters) - Spot iron ore prices to China fell for a fourth-straight session on Friday to a level last seen in late January, on concerns over slowing demand with steel mills expecting further declines.

Indian ore with 63.5 percent iron content was quoted in China at $191-193 per tonne including freight on Friday, versus $193-$195 on Thursday, Chinese industry consultant Mysteel said.

"The overall market is still under a bearish atmosphere. It is still too early to say when a turning point will come," said an iron ore trader in Shandong province.

Iron ore hit $200 per tonne in mid-February, the highest level since February 2008, but a lull in trading as steel mills held back on purchases has dragged down prices by almost 5 percent.

A few deals were concluded at below $190 per tonne including freight this week, as buying from top consumer China continued to wind down.

"I have not heard of China buying from many days, and even enquiries are less. I had no enquiries since 15-20 days, the last deal was done in the first week of January," said Somshri Patnaik, partner at PM Minerals, an iron ore trader in the eastern Indian state of Orissa.

Three global iron ore indexes also fell on Thursday, touching a more than one-month low, as the whole metals complex was saddled by worries that rallying oil prices due to the unrest in North Africa and Middle East will limit global growth.

The Platts' 62 percent iron ore index IODBZ00-PLT tumbled $2 to $184.75 per tonne including freight, the lowest level since Jan. 17.

Metal Bulletin's 62 percent index .IO62-CNO=MB slumped $2.98 to $183.58 per tonne, the lowest since Feb. 8, and the Steel Index's 62 percent gauge .IO62-CNI=SI slipped 80 cents to 184.1 per tonne, the lowest since Jan. 19.

The benchmark rebar contract for October delivery on the Shanghai Futures Exchange closed at 4,869 yuan ($740.2) per tonne, down 0.4 percent from the previous close and at a near two-month low.

SWAPS DOWN, FUTURES FLAT

Singapore Exchange-cleared swaps fell again on Thursday, trending downward over the months ahead, reflecting the concern of market players over near-term demand and prices.

The contract for March slid $1.57 to $167.1 per tonne, April slipped $1.12 to $158.05 per tonne, and May declined $1.37 to $156.3 per tonne.

The most-active 62 percent ore for March delivery on the Indian Commodity Exchange s little changed at 8,037 rupees ($177) per tonne, including freight cost to northern China.

A similar contract on the Multi Commodity Exchange barely moved at 7,596 rupees per tonne, free on board.

The two exchanges launched the world's first iron ore futures contracts on Jan. 29, but volumes have been modest with trading limited to domestic players.

Iron ore supplies from India, the world's third-largest iron ore exporter, have been limited following a ban on shipments from southern Indian state of Karnataka, the second-biggest producing state, which is currently being appeal in the Supreme Court.

Eastern Indian state of Orissa and central state of Chhattisgarh are also seeking a ban on shipments of the steel making ingredient. ($1=6.578 Yuan) ($1=45.37 Indian rupees)(Editing by Chris Lewis and Ramthan Hussain) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

Rio, BHP May Raise Second-Quarter Contract Iron Ore Prices 23%

Rio Tinto Group and BHP Billiton Ltd., the world’s second- and third-largest iron ore exporters, may raise contract prices about 23 percent in the second quarter from the first as spot prices hit a record, according to calculations based on The Steel Index pricing.

The price of 62-percent iron ore arriving at Tianjin port averaged $178.03 a metric ton, including shipping, from Dec. 1 to Feb. 24, compared with $149.91 in the previous three months, according to The Steel Index. The price rose to $191.9 a ton on Feb. 16, the highest level since the data became available in November 2008. Average shipping costs fell to $7.3 a ton in the December-February period from $11.26 in previous three months.

Steel prices in China climbed to 4,961 yuan a metric ton on Feb. 15, the highest since Sept. 2008, enabling steelmakers to expand profit margins and pass on higher raw material costs.

“With the quarterly price hike, Chinese steelmakers are still making profits under the current steel prices,” said Henry Liu, a Hong Kong-based analyst with Mirae Asset Securities Co. “But steel prices may incur a substantial correction in April due to increasing credit curbs and an industry overcapacity.”

Quarterly prices are typically based on figures derived by deducting freight costs from the three-month average of iron ore price indexes provided either by The Steel Index, Platts or Metal Bulletin with a one-month lag period.

Pricing Options

Rio, BHP and Rio De Janeiro-based Vale SA, the biggest iron ore supplier, abandoned annual pricing last year in favor of quarterly agreements as spot prices rose. BHP offers various pricing options including quarterly, monthly and weekly pricing as well as auctions to mills, according to Mysteel Research Institute analyst Tang Xiaolan and Mirae’s Liu.

Rio Tinto spokesman Bruce Tobin declined to comment on likely price increases when contacted today. Fiona Martin, a spokeswoman for BHP, also declined to comment.

China’s steel inventories held by traders increased 11 percent to 14.72 million metric tons by the end of January from a month ago, reaching the highest level since October, the China Iron and Steel Association said last week, as private steelmakers have been running at full capacity on higher prices.

BHP fell 0.1 percent to close at A$45.95, and Rio was down 0.4 percent at A$83.93 on the Australian stock exchange. Baoshan Iron & Steel Co., China’s biggest listed steelmaker, fell 1.3 percent to close at 6.85 yuan in Shanghai.

Metal Bulletin

Second-quarter prices may increase 24 percent, according to data compiled by Metal Bulletin, which tracks 62-percent iron content ore arriving at China’s Qingdao Port. The average price has risen to $175.28 a ton for the period from Dec. 1 through Feb. 23, compared with $146.65 in the previous three months.

Contract iron ore prices rose about 7 percent in the January quarter after falling 13 percent in the prior three months.

The price Rio charges steelmakers may rise about 34 percent in the second quarter from the previous three months based on the Platts index dated to Feb. 18, according to an e-mailed document sent by Platts via its public relation agency. The prices are measured in dry metric tons which exclude a typical 8 percent moisture of iron ore.

--Helen Yuan, with assistance from Rebecca Keenan in Melbourne. Editors: Alan Soughley, Indranil Ghosh

To contact the Bloomberg News staff on this story Helen Yuan in Shanghai athyuan@bloomberg.net

Brazil's Vale sees 20 pct Q2 iron price rise

Fri Feb 25, 2011 3:30pm EST

* Iron spot prices soaring on strong demand from China
* Quarterly system helped Vale boost profits

SAO PAULO, Feb 25 (Reuters) - Brazilian mining giant Vale expects iron ore prices to rise by around 20 percent in the second quarter, a company director said on Friday. Vale, the world's largest iron ore miner, has seen its profits soar since it replaced the annual benchmark pricing system with a quarterly system based on a three-month average of the spot market prices for iron ore.

Jose Carlos Martins, Director of Marketing, Sales and Strategy, said prices would rise around 20 percent, without providing details about what the final price would be. Iron was trading around $184 per tonne on the spot market on Friday .IO62-CNI=SI after soaring above $190 in recent weeks on heavy demand from China and tight supplies out of
India.

The second quarter price will be based on the average spot market prices for December, January and February, according to Vale's pricing system.

Data provider The Steel Index (TSI) last year said Vale's first quarter ore prices would rise four percent from the
previous quarter to around $140 per tonne for ore with 65.5 percent iron content. [ID:nL3E6MU04H]

Reuters calculations in December showed the price for the first quarter would likely be $149 per tonne. [ID:nTOE6BT05G]

The company is in discussions with a group of banks for a $3 billion revolving credit facility that would be used for
general corporate purposes, Chief Financial Officer Guilherme Cavalcanti said.

(Reporting by Guillermo Parra-Bernal;editing by Sofina Mirza-Reid)

Steel, iron, chrome ore and coal prices to hit a record in 2011

Iron ore exporters to raise contract prices about 25 percent in the second quarter from the first as spot prices hit a record, according to calculations based on the Steel Index pricing. 

China Steel Corporation, Taiwan announced hike in steel prices in domestic markets. China Steel cited increased raw material cost as the reason for the increase in the prices. 
The international markets, 

The 15 percent price hike for steel can be expected as China Steel has increased prices for April and May contracts by 12.1 percent. The US and Eureopean Steel official talked about increase in prices saying high input cost is the reason and increase in the domestic demand . 

AlbanianMinerals estimates, price of coking coal will be 35 percent up during the second quarter from the first quarter, on account of increasing global demand. 
Chrome ore exporters are increasing prices as oil prices have increased dramatically.The demand for chrome ore in China and India is estimated to increase 15 - 20 percent this year. 

AlbanianMinerals and Bytyci SHPK will increase the production of Chrome ore 500 percent in 2011. In May 2011 AlbanianMinerals will start mining one of the largest deposit of chrome ore in Europe on Zogaj, Tropoje, Albani. 
This open pit mining in Zogaj's location will be the largest production of chrome ore in Europe. 
AlbanianMinerals have build all needed infrastructure in the location. 

AlbanianMinerals in New York is receiving a record new orders for raw minerals,Chrome ore, copper, nickel, coal and iron ore for 2011 . 
The world's economy is expected to grow by five percent in 2011, this growth will boost all metal prices.

Brazil’s Usiminas to raise steel prices by 5%~10% from Mar.

Reportedly, Brazil’s steelmaker Usiminas was going to increase the steel prices by 5%~10% from March 15th, according to the vice president of the company.

It’s known that Usiminas had been forced to offer discount on the product to compete against cheaper import materials.

Besides, the company has being suffering the pressure of higher production costs from iron ore and coal. 

Meanwhile, the company sold 1.58 million tons of steel in last fourth quarter, down by 7% year on year.

Steel prices in far east countries

Taiwan's Chung Hung Steel to up its latest prices sharply

After Taiwan's China Steel Corp.(CSC) released its latest price yesterday, Chung Hung Steel(CHS), the subsidiary company of CSC, has also made its new price announcement today. 

The company has surged its HR coil price by NTD$2700/ton, CR coil by NTD$2200 to 2400/ton and GI price by NTD$3200/ton which are all higher than most expectations by market analysts.

For export prices, CHS has not released its prices. However, it may lift by over USD$100/ton. CHS's new HR price will be about NTD$23000 to 24500/MT, CR price to be NTD$25500 to 26000/MT and CGI price to be NTD$28400 to 28700/MT.

The CR price slightly down in Shanghai

Reportedly, the prices of cold rolled coil (CRC) have slid in line with HR coil's price in China’s Shanghai market . 

At present, Angang’s 1.0mm CRC are quoted at RMB5, 650/ton, down by RMB50~RMB100/ton in comparison of last week.

Market participant forecasted that the CRC price would keep moving upward due to high raw material cost despite slow demand in China.

The HR prices cool off in Shanghai

It’s reported that the prices of hot rolled coil (HRC) have cooled down in Shanghai market in this week. . 

The prices have slid by RMB100-150/ton averagely in comparison of that in last week. At present, the price of Q235 HRC in dimension of 2.75mm x 1250mm was at RMB4880-4900/ton; that of Q235 HRC in dimension of 4.75mm~11.5mm x 1500mm was at RMB4, 630-4,670/ton; that of Q345 HRC in dimension of 4.5mm~11.5mm was RMB4850-4900/ton.

However, some said that the price may rise again since the raw material price is going upward.

China's steel prices reported to back to normal

Following Baosteel's pricing action, Hebei Iron and Steel has also hiked the ex-factory prices for by hundreds of RMB. 

At the same time, China’s domestic steel prices have withdrawn for the first time since the Chinese New Year holidays.

According to industrial insider, the current correction on prices has to do with the market reaction against the previous price hike.

However, as the weather has become warmer after the Spring Festival, it helps support construction industry and steel prices. It is said the price hike for steel products in the past weeks has already surpassed the production costs.

Besides, due to tight supply of raw materials such as iron ore and coking coal in the global market, it’s estimated that rising raw material costs will provide strong supports for steel products. 

CSC hikes steel plate prices for Apr./May delivery

Reportedly, China Steel Corp. (CSC) announced to increase the steel prices for April/May delivery yesterday.

Among them, the prices of steel plate have increased by NT$2,900/ton averagely; that of SS400/A36 steel plate has soared by NT$3,100/ton; that of hot rolled steel plate has hiked by NT$3,000/ton; that of AP steel plate have raised by 3,500/ton and that of shipbuilding steel plate have been up by 2,900/ton respectively.

CSC hikes steel prices by 12.1% on average for April and May

China Steel Corp. (CSC) announced the latest prices for April and May delivery. The company has decided to raise its all product prices by 12.1% on average as same as the market’s forecast.

After adjustment, the latest prices of steel plate, wire & bar, HRC and CRC have increased by NT$2,949/ton, NT$2,500/ton, NT$2,945/ton and NT$2,747/ton respectively.

Also, the prices of electronic galvanized steel, electrical steel coil and hot dipped galvanized steel have surged by NT$3,500/ton, NT$2,000/ton and NT$3,167/ton.

Iron ore prices slide for the second day

Inactivity plagued the iron ore market as the uneventful week drew to a close. The market remained in quandary with offered and transaction prices showing wide gaps making judgment an extremely difficult proposition. 


But it is clear that Chinese steel mills have gained an upper hand cornering cheaper prices depending on the vulnerability of the Indian iron ore miners and suppliers.


Offers for Indian origin Fe 63.5/63% plummeted to levels of USD 191 per tonne to USD 193 per tonne CFR China. 

The Libyan and Egyptian crisis took its toll on the metals futures markets Futures market of imported iron ore posts a weak trend. Favorable factors such as tight supply and RMB appreciation notwithstanding, imported iron ore will continue to see corrections on concerns of tight liquidity and adverse political environment.

Cyclone shuts WA iron ore ports; oil, gas plants

by Reuters

A cyclone bearing down on Western Australia has brought iron ore shipments from the world's top exporter to a near standstill as ports shut ahead of the storm.

Two of the world's largest iron ore terminals at Port of Dampier and Port Hedland have suspended operations as Cyclone Carlos builds and sweeps toward the country's northwest.

Nearly all of Australia's around 400 million tonnes of iron ore exports are shipped from the two ports.

Port officials and meteorologists say it could be days before the storm passes and ships can return to the loading berths used by global mining giants such as Rio Tinto Ltd and BHP Billiton Ltd.

The centre of the cyclone is forecast to pass over Dampier around 1800 AEDT and continue to make its way south causing localised flooding.

Even a short interruption could add to a demand-driven rally toward $US200 a tonne on global iron markets. Iron ore prices have risen over 10 percent to date this year.

Gales with wind gusts to 110 kilometres per hour were slamming into coastal areas west of Port Hedland and were heading westward towards Dampier, according to the Australian Bureau of Meteorology.

Cyclones are a normal fixture of an Australian summer but the national weather bureau has indicated that above-average cyclone activity is to be expected this season due to a La Nina weather event.

"We've tied the port down and closed and all the vessels have gone to sea to get past the cyclone," chief executive of the Dampier Port Authority Steve Lewis said.

The Port of Dampier is one of two ports in Western Australia used by Rio Tinto to export around 200 million tonnes of iron ore each year.

"We're fully tied down at the coast, so there's no ship or rail movement until it passes," a Rio Tinto spokesman said.

Port Hedland suspended operations on Monday evening with the approach of Carlos, a category two storm, which is forecast to move westward in the coming days before turning southward.

A spokesperson for the Port Authority there told Reuters the harbour master would wait until the danger had passed and assess the situation before reopening the port to shipping.

BHP Billiton relies on Port Hedland to ship more than 100 million tonnes of iron ore a year. Fortescue Metals Group and Atlas Iron also use the port exclusively.

Australia's northwest coast is also home to some of the country's biggest oil and gas operations, with several of them suspending operations and battening down as the cyclone crosses through the area.

Woodside Petroleum Ltd halted production at its Cossack Pioneer floating, production, storage and offloading unit on the North West Shelf due to Tropical Cyclone Carlos the company said on Monday.

Apache Corp also halted production at its Stag and Van Gogh oil fields off the coast of Western Australia on Monday.

Chevron shut oil and gas production at Barrow and Thevenard Island facilities on Monday and non-essential workers were evacuated from the facilities.

"Production is being shut in and wells secured," Chevron spokesman Guy Houston said.