Iron ore price flirts with key $100/T level on firm demand, China stimulus hopes
Analysts say near-term demand for iron ore remain strong, supporting prices.
Global miner Anglo American is ramping up metals and diamond production to hit full-year targets it set in spring, it said on Thursday, as it reported a sharp slump in second quarter output caused by the coronavirus.
The firm said the targets were dependent on the course taken by the pandemic, which is spreading fast in South Africa where it make around half of its profits, while a drought in Chile affecting its largest copper mine shows little sign of ending.
In the three months to June, overall production fell 18%, with diamonds, platinum, palladium, iron ore, coal and manganese all falling, while copper and nickel rose.
Second quarter copper output rose 5% to 167,000 tonnes, driven by a 38% rise at the Collahuasi mine in Chile
Anglo said it was ramping up production and operating at about 90% total capacity by the end of June from around 60% in April, and maintained its 2020 outlook for all products apart from coal.
It had cut capital expenditure and trimmed many of its full year output targets in April.
Anglo said government lockdowns in Botswana, Namibia and South Africa hit second quarter output of diamonds, platinum group metals, iron ore and coal.
Activity has since picked up in South Africa, where the government exempted mines during the quarter from curbs implemented to contain an outbreak that crossed the threshold of 300,000 cases on Wednesday.
In addition to coronavirus-related shutdowns, Anglo American Platinum was hurt by repairs and ramp-up of a converter plant.
Second quarter copper output rose 5% to 167,000 tonnes year on year, driven by a 38% rise at the Collahuasi mine in Chile.
But output at Anglo’s largest mine in Chile, Los Bronces, fell 12% and continues to be impacted by severe drought.
A gas explosion at the Grosvenor metallurgical coal mine in Australia hit coal output, Anglo said. Australia launched an inquiry into the blast, which injured five workers.
“With expectations relatively low heading into the quarter, this result will likely be taken relatively positively,” said RBC Capital Markets analyst Tyler Broda.
(By Zandi Shabalala; Editing by Edmund Blair and John Stonestreet)
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