The import price of 62% Fe content ore at the port of Tianjin declined more than 2% to trade at $56.20 per dry metric tonne on Wednesday, a near-eight week low, according to data supplied by The Steel Index.
While demand has held up well, a growing supply glut – an estimated 180 million additional tonnes will enter seaborne trade through 2020 – raises fears of further declines in the price of the steelmaking raw material.
Roy Hill’s ramp-up to 55 million tonnes per year are going swimmingly, Rio Tinto’s Silvergrass received board approval last month (and the shelving of Simandou surprised no-one), Fortescue has been hitting and exceeding targets, as has Anglo American’s Minas Rio, while BHP Billiton’s South Flank can be turned on if the world’s number three iron ore miner sees it’s losing market share.
And then there’s Vale’s S11D. Construction of the $17 billion Carajas Serra Sul mine expansion and railway project in northeastern Brazil is almost complete. Capacity is an eye-watering 90 million tonnes per year at cash costs Vale said it can push down into single digits. First ore is expected in January.
S11D – unremarkable moniker notwithstanding – is the most recognized four letter word in the iron ore world. It’s size and cost of production is enough to counter even the most ardent bulls.
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