Global glut is not a new word in the seaborne market. It’s been long known that the world’s largest iron ore producers have been producing and continuously shipping low cost output in the seaborne market, almost effortlessly. But, in H1 2016, the top miners kept themselves from reaching their production guidance.
Vale’s mine named Carajas recorded highest production at 36.5 mnt iron ore in Q2 FY16 — The company is in the mid of ramping up production at its S11D mine, iron ore’s largest development project, which should be finished before year-end. S11D will add another 90 mnt to the miner’s capacity, taking it over 400 mnt. — Pellet production was down due to halt of the Fábrica pelletizing plant, delays in obtaining environmental permits for the expansion of adjacent mines and the scheduled maintenance stoppages at the Tubarao plants in Q2 FY16. Tubarao’s production achieved monthly record of 637,000 mt in May’16.
The miner aims to produce around 340 mnt iron ore by the end of 2016. Production in 2015 was 345.9 mnt. Note: Brazilian financial year FY16 started from 01st Jan’16 and ends on 31st Dec’16
2. RIO TINTO
World’s 2nd largest iron ore producer, Rio Tinto, shipped 158.9 mnt iron ore in H1 2016.
The miner continuously supplied low-grade iron ore in the global market amid a recovery in global iron ore prices. The average sales price in the first half of 2016 was USD 44.5/wmt.
Rio Tinto expects its iron ore production from Pilbara to be between 330 and 340 mnt in 2017 and targets 330 mnt in 2016.
Note: Rio Tinto follows calendar year
3. BHP Billiton
In recent reports, the miner released its annual operational review for FY16, notifying production of 227 mnt iron ore during Australian FY16.
BHP Billiton missed its target production guidance by 10 mnt for FY16.
Now, for Australian FY17, the miner expects to produce between 228 and 237 mnt iron ore excluding production at Samarco.
The average realized prices of iron ore in the first half of Australian FY16 (July-Dec’15) was USD 43/mt, whereas the average realized prices of iron ore in the second half of Australian FY16 (Jan-June’16) was USD 44/mt.
Note: Australian financial year FY16 began on 01 July’15 and ended on 30 June’16
Total 169.4 mnt iron ore was shipped by FMG in FY16, against 165.4 mnt of exports in FY15. The miner aims to ship around 165-170 mnt material in FY17.
The average realized prices for Q4 FY16 was USD 48.7/mt. The miner’s cost of production dropped by more than one-third to USD 14.3/mt from June quarter in FY15.
FMG is also optimistic about its iron ore blending project with Brazil’s Vale and expects it to get completed in near future.
Source: Steel 360 Magazine Aug’16 Issue