News Australian Iron Ore Supply Keeps World Output and Prices Steady

April 28, 202031

Iron ore prices remain surprisingly stable amidst the COVID-19 pandemic as the Chinese market reopens.

No market has been left untouched by the coronavirus crisis. The bulk commodities market also has seen prices plunging and demand declining, but iron ore prices have bucked this trend and have remained steady. Australian iron ore companies such as BHP have had a good run in the last one year duet to disruptions in supplies from Brazil and tropical storms, which have driven up demand and the prices too.

The iron ore benchmark only dipped to a three-month low compared to aluminum and copper prices, which have dropped to a 5-year low. The iron ore benchmark has been hovering around $80 per tonne. Experts say that only 8 percent of iron supply has been hit by the pandemic, whereas other minerals have seen a 25 to 5 percent hit.

With the pandemic leading to lockdowns and closure of mills and factories, there has been a fall in demand for iron ore all over the world. The automobile sector, which is a consumer of steel, has been the hardest hits with sales dipping and product and assembly lines lying idle. The US and the European market is expected to see a decline of 10 to 15 percent in demand for iron ore this year. BHP has said it expects a double-digit cut in the world market soon due to logistic difficulties and shrinking demand.

BHP’s quarter results until March have shown good numbers, but the companies in Australia may see a slight decline in the coming months. Though, the opening of the Chinese market will bring some relief. After the widespread infection of the coronavirus in the country, China has managed to contain the contagion and is opening up various industries in a phased manner.

China accounts for about 70% of global demand for seaborne iron ore, so a rebound in the sector is very significant for the industry China’s imports about 1.1 billion tons of iron ore, against 100 million by Europe.

Though the risk of infections is still there, China has opened up its ports and started importing the mineral, keeping the prices high. BHP estimates electric-arc furnace utilization has recovered to 56% after falling to 12%. The Chinese government has announced a stimulus package, and the People’s Bank of China has said that it would halve the reserve requirement ratio.

Brazilian mining operations like Vale are struggling to meet demand, and the pandemic has taken its toll in the country with poor management. Production is predicted to drop to the 2019 level of around 300 million tons in this South American region when the Brumandinho dam collapse halted production.

Australia’s enormous Pilbara operations have not felt any of these pains and are in operation. The higher cost of the iron ore may well cushion the loss of Brazilian Vale. But the big Australian companies are selling more, too. BHP reported a 3% increase in production for the nine months to the end of March. Rio Tinto Group, now the world’s top producer, last week also reported higher first-quarter output and shipments, compared to a year earlier, reports Bloomberg.

Costs of production are also coming down due to a weak currency and the oil prices crashing. BHP’s unit costs were also coming down. Exports from Canada, South Africa, and India, which represent about 150 million tonnes of iron ore, or around 10% of global seaborne supply have been hit too due to the crisis, and this may further hamper the seaborne supply of iron ore. The downward shift in steel prices due to the virus may affect the iron ore prices too. But it is hoped a gradual correction in pricing will happen when demand for the ore starts to decline in the long term.

We do not know yet how long Australis’ good run in this commodity will continue to hold up. Other producers may restart production, adding to supply. China may see another wave of the virus and suffer setbacks. It may be another unexpected year of grace for Australian iron ore.

 

Whether you want to stay up-to-date on the latest business news, read in-depth CEO interviews, or find new ideas on leadership, management and innovation, Industry Leaders Magazine is here to suit your needs and help you stay more informed.

 
Source Link: https://www.industryleadersmagazine.com/australian-iron-ore-supply-keeps-world-output-and-prices-steady/

31 comments

  • Royal CBD

    August 1, 2020 at 1:12 pm

    Howdy I am so thrilled I found your web site,
    I really found you by mistake, while I was researching on Aol
    for something else, Anyways I am here now and would just like to say thank you for a marvelous post and a all round thrilling blog (I also
    love the theme/design), I don’t have time to look over it all at the minute but
    I have book-marked it and also added in your RSS feeds, so when I have time I will be back to read a great deal
    more, Please do keep up the fantastic work.

    Take a look at my website; Royal CBD

  • free xbox live codes

    August 19, 2020 at 12:17 pm

    I do not even know how I ended up here, but I thought this post was good.
    I do not know who you are but certainly you’re going to a famous blogger if
    you aren’t already 😉 Cheers!

  • We’re a group of volunteers and opening a new
    scheme in our community. Your site offered us with valuable info to work on. You’ve done an impressive job and our entire community
    will be grateful to you.

  • itunes free codes

    August 20, 2020 at 4:57 am

    Thank you for the good writeup. It in fact was a amusement
    account it. Look advanced to more added agreeable from you!
    However, how could we communicate?

  • itunes gift card generator free

    August 20, 2020 at 5:09 am

    Having read this I thought it was very enlightening.
    I appreciate you finding the time and energy to put this article together.
    I once again find myself personally spending a significant amount of time both reading and posting comments.

    But so what, it was still worth it!

  • itunes free codes

    August 20, 2020 at 6:16 am

    Hey I know this is off topic but I was wondering if you
    knew of any widgets I could add to my blog that automatically tweet my
    newest twitter updates. I’ve been looking for
    a plug-in like this for quite some time and was hoping maybe you would have some
    experience with something like this. Please let me know if you run into anything.

    I truly enjoy reading your blog and I look forward to your new
    updates.

  • free itunes codes

    August 20, 2020 at 6:42 am

    I really like it when folks come together and share thoughts.
    Great site, continue the good work!

  • free itunes codes

    August 20, 2020 at 7:40 am

    Greetings! I know this is somewhat off topic
    but I was wondering if you knew where I could get a captcha
    plugin for my comment form? I’m using the same blog platform as yours and I’m having problems finding
    one? Thanks a lot!

  • bigfish

    August 23, 2020 at 9:58 pm

    My brother recommended I might like this website.
    He was entirely right. This post actually made my day. You cann’t imagine just how much time I had
    spent for this information! Thanks!

  • see my site

    August 27, 2020 at 6:18 pm

    It’s actually a great and useful piece of info.
    I am satisfied that you simply shared this helpful information with us.
    Please stay us informed like this. Thanks for sharing.

  • lose weight fast

    August 27, 2020 at 10:53 pm

    Good day! I just wish to offer you a big thumbs up for the great info you have here on this post.
    I am returning to your website for more soon.

  • rolex replica

    August 27, 2020 at 11:16 pm

    Definitely fantastic, really worth buying, thank you!

  • Steven

    August 28, 2020 at 12:17 pm

    had to return them, too gauty and big, very disappointed,, 2nd time returning this designers item

  • Kyle

    August 28, 2020 at 4:47 pm

    great bargain!!!! fast shipping

  • replica rolex

    August 29, 2020 at 1:11 pm

    beautiful replicawatch, very stylish, best for business casual

  • pokemon hack

    August 29, 2020 at 4:13 pm

    Valuable information. Fortunate me I found your web site accidentally, and I’m
    surprised why this accident didn’t came about in advance!
    I bookmarked it.

  • free psn codes

    August 31, 2020 at 10:43 am

    hello there and thank you for your information – I have certainly picked
    up anything new from right here. I did however expertise several technical issues
    using this web site, as I experienced to reload the website lots of times
    previous to I could get it to load correctly.
    I had been wondering if your hosting is OK? Not that I am complaining, but slow loading instances times will very
    frequently affect your placement in google and can damage
    your quality score if advertising and marketing with Adwords.

    Anyway I am adding this RSS to my email and can look out for much more of
    your respective exciting content. Make sure you update this again soon.

  • hack brawl stars

    August 31, 2020 at 1:08 pm

    Good day very nice blog!! Man .. Beautiful ..
    Amazing .. I’ll bookmark your website and take the feeds additionally?
    I am happy to find so many useful info here in the post, we need work out more strategies on this regard, thank you for sharing.
    . . . . .

  • coin master free spins

    August 31, 2020 at 2:21 pm

    Thank you for the good writeup. It in fact was a amusement
    account it. Look advanced to far added agreeable from you!
    However, how can we communicate?

  • get free robux fast

    August 31, 2020 at 4:42 pm

    Wow that was unusual. I just wrote an really long comment but after I clicked submit my comment didn’t appear.
    Grrrr… well I’m not writing all that over again. Anyways,
    just wanted to say great blog!

  • free v bucks generator

    August 31, 2020 at 6:54 pm

    Hello there! Would you mind if I share your blog
    with my myspace group? There’s a lot of folks that I think would really enjoy your content.
    Please let me know. Thanks

  • coin master hack erfahrung

    September 7, 2020 at 4:35 am

    hello there and thank you for your info – I’ve definitely picked up anything new from right here.
    I did however expertise some technical points using this web site, since I
    experienced to reload the site lots of times previous to I could get it to load properly.
    I had been wondering if your hosting is OK? Not that I am complaining,
    but sluggish loading instances times will often affect your placement in google and can damage
    your high quality score if advertising and
    marketing with Adwords. Anyway I am adding this RSS to my email and can look out for a lot
    more of your respective intriguing content. Make sure you update this again soon.

  • spins coin master

    September 7, 2020 at 7:12 am

    This is really interesting, You’re a very skilled blogger.
    I have joined your feed and look forward to seeking more of your wonderful post.

    Also, I’ve shared your web site in my social networks!

  • web design bucuresti

    September 8, 2020 at 9:07 pm

    It’s remarkable to pay a visit this website and reading the views
    of all friends concerning this piece of writing, while I
    am also eager of getting knowledge.

  • free spins coin master

    September 11, 2020 at 3:43 pm

    Hello would you mind stating which blog platform you’re using?
    I’m planning to start my own blog soon but I’m having a hard time selecting
    between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design and style seems different then most blogs and I’m looking for something completely unique.
    P.S Sorry for getting off-topic but I had to ask!

  • netflix account generator

    September 15, 2020 at 8:59 pm

    obviously like your website but you need to check the
    spelling on quite a few of your posts. Many of them are rife with spelling problems and I in finding
    it very bothersome to inform the truth on the other hand I’ll definitely come back again.

  • free vbucks

    September 16, 2020 at 3:43 am

    I’m gone to tell my little brother, that he should also pay a quick visit this weblog on regular
    basis to take updated from hottest reports.

  • bingo blitz cheats

    September 16, 2020 at 9:03 am

    An outstanding share! I’ve just forwarded this onto a friend who
    had been doing a little homework on this. And he
    actually ordered me breakfast because I discovered it
    for him… lol. So let me reword this…. Thanks for the meal!!

    But yeah, thanks for spending some time to discuss this matter here on your internet
    site.

  • roy jones jr vs mike tyson full match online

    September 17, 2020 at 7:31 pm

    What’s Taking place i am new to this, I stumbled upon this I have found It absolutely helpful and it has
    aided me out loads. I hope to contribute & aid other customers like its aided me.
    Good job.

Leave a Reply

Your email address will not be published.

Copyright © 2020 YGL iBay International Sdn. Bhd. All rights reserved.