Sierra Leone woos miners to clean energy with $11 billion plan
Most mining firms rely on their own diesel supplies to extract iron ore, diamonds, rutile and bauxite in the resource-rich country.
On Friday, the iron ore price rebounded sharply from a 15-week low struck yesterday after customs data from top consumer China showed imports reaching a record high.
The Steel Index benchmark price for Northern China 62% Fe ore gained 4.5% to trade at $60.00 a tonne on Friday. Year-to-date iron ore has averaged $72 a tonne compared to $56.50 over the course of 2016.
China’s iron ore imports constitute more than 70% of the global seaborne trade and September cargoes arriving at the country’s ports jumped to 103m tonnes, up 11% compared to a year earlier. September imports rose by 14.3m tonnes from August. The previous record of 96.5m tonnes was set in March this year.
Shanghai rebar futures – the most actively traded steel contract in the world – soared 7% on Friday. Chinese steelmakers have been producing at record rates in anticipation of mandated output cuts during winter months in an effort to alleviate pollution problems in large cities.
“The market is still driven by production cuts amid Beijing’s push to fight smog as we see some cities have implemented output curbs one month ahead of the plan,” said Yu Yang, analyst at Shenyin & Wanguo Futures in Shanghai told Reuters.
“So when steel prices rise, mills have bumper profits and this has driven up raw materials too.”
Beijing’s war on smog has also pushed hundreds of domestic Chinese producers out of business as steelmakers opt for high-grade supply from major producers in Australia, South Africa and Brazil. The government recently announced that it would shut about a third, or around 1,000, of the country’s iron ore mines which struggle with average grades of only around 20% iron ore content.
2 Comments
King Blonde
As I said here, two months ago: the iron ore’s price will not fall sharply. And the battle will be between the mining companies who will do the best job (Vale or Rio). Now I will open my champagne, thanks to vale3.
Altaf
I think, China is using its reserves of 3 trillion dollars into commodities. This serves two purposes. One is the reserves are diversified. The other is it want to finance its industrial inputs. Even though it is moving away from manufacturing to services, the manufacturing base will not go away overnight. China may be loading itself with feed stock for the next few years. By the time China is finished with loading up with all kinds of raw materials (oil, ores etc) the low cost minerals are all mined up and when the other nations will be struggling with high cost inputs, China will bring out its cheap raw materials imported years back. Once again China will have cost advantage vs other nations.