Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
Australia’s Mount Gibson Iron Ltd said on Friday it will suspend operations at its Shine iron ore project in Western Australia to wind down expenses, following a drop in the prices of the steelmaking ingredient and rise in shipping costs.
Iron ore prices marked their first quarterly loss in two years and declined more than 40% since hitting a record peak in mid-May, hit by power shortages in China and restrictions on steel output to reduce carbon emissions.
Mount Gibson’s Shine project will continue mining and processing in October to make a shipment at the end of the month, after which operations at the site will be suspended pending “improvement in iron ore market conditions”, it said.
“This is a disappointing decision for the company given that the Shine mine is in its first year of operation,” Mount Gibson said.
“However, it is a commercially sensible decision necessary to limit cash outflows and preserve the future optionality of the Shine deposit.”
Mount Gibson also withdrew its sales outlook for Shine of about 1 million wet metric tonnes (Mwmt) for fiscal 2022. The miner is targeting group sales of between 3 Mwmt and 3.2 Mwmt for fiscal 2022.
Shares of the iron ore miner were down nearly 7% at A$0.45, as of 0023 GMT, their worst intraday drop since Sept. 17.
(By Sameer Manekar; Editing by Sherry Jacob-Phillips)
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