IGO to record impairment against nickel assets in strategy shift
IGO has been undertaking a strategic review in an attempt to revaluate its resources.
Iron ore prices recovered slightly on Tuesday, but continued trading below the $80 a tonne level, the lowest price for the steelmaking material since early January.
In the latest session, the spot price for benchmark 62% fines gained barely 0.09 cents to $79.45, according to Metal Bulletin, amid concerns around high Chinese stockpiles.
So far this year, the commodity has risen just 0.6%, quite far from the over 20% gains seen just over a month ago.
Iron ore prices continue to trade below the $80 a tonne level, the lowest price for the steelmaking material since early January.
Some believe the current drop in prices have its roots in mounting inventory at Chinese ports, currently sitting at the highest levels since 2004, the FT.com reported citing Shanghai Steelhome data.
Others, blame an ongoing glut that has worsened due to that fresh supply coming from recently opened mines, for the weaker prices.
Yet there are some, such as Stan Wholley, president for the Americas at CSA Global, and who has vast experience in the iron ore market, who believe it’s too early to say the current downward trend is the beginning of a new slump.
“If we go back nine or eight months, iron ore was in the $40s and everyone was saying there was no reason to see a recovery, and that it would probably stay in the range of $40 to $60 for the next two to three years,” Wholley told MINING.com last month. “Those pundits were shown to be very wrong (…) If you look at current prices in context, you’ll see all of the majors are making incredibly good margins at the moment and even small or mid-tier iron producers are making money at current prices.”
The consultant, with more than 25 years of experience in exploration and mining geology, particularly in the iron ore sector, said he didn’t believe prices would return to the highs hit between 2008 and 2012, but he added that as far as they hover in the $60-$90 range, it’d be enough for most producers to keep their business not just going, but doing well.
