ein sehr guter Bloomberg Artikel zur derzeitigen Lage am Iron ore Markt.
Fazit: druch die niedrigen Preise können viele kleineren Anbieter inkl. vieler Chinesen nicht mehr produzieren und haben eingestellt. Sollte der Markt wieder anziehen, dann werden die großen 3 BHP/Rio T. und Vale (alle Superstars die 2/3 des Gesamtmartes domninieren) sicherlich davon profitieren, da es immer eine Weile braucht, bis mittlere und kleinere wieder Ihren Abbau aufnehmen können, wenn das überhaupt geschieht.
Also nur noch etwas Geduld - das wird schon "irgendwann" - wann immer das auch sein wird :-)
Rio Tinto Group and BHP Billiton Ltd. (BHP), two of the world’s biggest iron ore producers, are benefiting as falling iron ore prices pressure smaller rivals in China to shut down.
The price of iron ore has plunged 44 percent from its February 2013 peak on the back of record output. That’s hurting mining companies in China where 20 percent to 30 percent of mines have closed, according to the China Metallurgical Mining Enterprise Association.
The closures are helping Rio Tinto and BHP which, along with Vale SA (VALE5), already control about two thirds of global seaborne supply from their low-cost mines. About $40 billion a year of iron ore is mined in China, the country that’s also the world’s biggest buyer of the steelmaking component.
“Many smaller mines in China have stopped production due to the falling prices,” said Sarah Wang, a Shanghai-based analyst with Masterlink Securities Corp. “It’s the right time for BHP and Rio to seize the opportunity to boost their market share.”
BHP, the world’s biggest mining company, last month also flagged the closure of some Chinese ore mines.‘
“Most of them are smaller ones, while the bigger ones are also starting to be affected,” Liu Xiaoliang, the association’s general secretary, said in an interview. “Almost 70 percent of the ore processing companies have also closed.”
Bear Market
Iron ore, which entered a bear market in March, this week hit a 21-month low of $89 a dry ton, down from a February 2013 peak of $158.90. Morgan Stanley expects prices to drop as low as $80 in the second half, and will average about $90 next year, according to a June 12 report.
Share prices for the top producers have slipped less than half that, a marked contrast to the last slump when they moved in near-lockstep.
BHP, the world’s third-largest iron producer, lost about 8 percent of its market value from the Feb. 20, 2013, the iron ore price peak, to the June 16 low, and the comparable Australian shares of Rio Tinto, the second biggest, declined 16 percent. Brazil’s Vale, the top iron miner, is down about 27 percent.
Share prices for producers already include ore prices, Deutsche Bank AG analysts led by Paul Young said in a June 16 report. The last time iron ore collapsed, falling 55 percent from Feb. 16, 2011 to Sept. 5, 2012, BHP and Rio Tinto slumped 33 percent and 44 percent.
Prices Retreating
Fortescue Metals Group Ltd. (FMG), the Australian producer controlled by billionaire Andrew Forrest, said last month that prices may continue to decline, potentially retreating to $80 a dry metric ton, the lowest level since 2009. Rio Tinto Chief Executive Officer Sam Walsh said this month a drop in the price to about $80 would see a lot of his competitors “disappear.”
Supply will outpace demand in the medium term with production from Australia and Brazil displacing high cost domestic producers in China, BHP’s vice president of iron ore marketing Michiel Hovers, said at an industry conference in May. BHP spokeswoman Emily Perry declined to provide additional comments this week on how falling prices may reshape the market.
“Fortescue is a highly competitive low cost, reliable business and while there is some price volatility near term, our supply into the iron ore market is critical to supporting China’s growth,” said Yvonne Ball, a spokeswoman.
Vale will continue to mine and sell its low-cost, high-quality ore, while many other producers will leave the market, the Rio de Janeiro-based company said in an e-mail. Rio Tinto spokesman Bruce Tobin declined to comment.
Still Superstars
About 80 percent of China’s mines have operating costs at around $80 to $90 a ton, according to the Shanghai-based consulting firm Mysteel.com. That compares with $44 for Rio Tinto, $53 for BHP, $68 for Vale and $77 for Fortescue, according to estimates from UBS AG.
“They are all superstars still,” said Tom Price, a Sydney-based commodity analyst for UBS. “Chinese production is under pressure right now.”
He estimates China will produce 370 million tons of seaborne grade equivalent ore this year and that more than half of its $40 billion industry is under threat.
Iron ore mines in China, where the iron content is typically half or less of that found in ore from Australia and Brazil, have been curbing output as prices decline. Smaller mines are closing while bigger ones affiliated with steel mills remain operational, Mysteel.com said in a report dated June 13.
“We expect an extra 250 million tons to be displaced and for high cost Chinese domestic mines to permanently close,” Deutsche Bank’s Young said in the June 16 report.
Demand Growth
To be sure, increased demand from Chinese steel mills and a rebound in prices may slow the shutdown of domestic ore mines. Citigroup Inc. estimates the greatest pressure on ore has been in the current quarter and expects prices to stabilize in the second half as supply from exporters levels off.
The displacement of marginal Chinese supply has begun as prices retreat, Goldman Sachs Group Inc. said June 3. Mines with as much as 100 million tons of output may close this year, according to Australia & New Zealand Banking Group Ltd.
“The majors are probably thinking they are well placed to take care of that market, they can increase production if other producers fall by the wayside,” James Wilson a Perth-based analyst at Morgans Financial Ltd., said by phone.
To contact Bloomberg News staff for this story: Rebecca Keenan in Perth at rkeenan5@bloomberg.net; Helen Yuan in Shanghai at hyuan@bloomberg.net
To contact the editors responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net Keith Gosman, Will Wade
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