Seeking Alpha

India iron ore output set to plunge by one-third as court shuts 26 mines

  • Iron ore prices drop below $100/metric ton for the first time in nearly two years on worries that demand from China is being outpaced by increasing iron ore output from global miners.
  • However, WSJ reports that India's iron ore production could fall by nearly a third this year due to a new court decision that ordered an additional 26 mines to be shut down.
  • A top government mining official says the order may mean India's exports this financial year could end up near last year's level of 15M metric tons vs. expectations of a rise in output to ~22M tons; India exported as much as 118M tons of iron ore in 2009-2010.
  • Global iron ore producers include CLF, VALE, RIO, BHP.
From other sites
Comments (7)
  • smithson
    , contributor
    Comments (3) | Send Message
    In this scenario, what is the outlook for VALE?
    19 May 2014, 09:50 AM Reply Like
  • oubaseball
    , contributor
    Comments (8) | Send Message
    Smithson ...good question. You would think this would help VALE.
    19 May 2014, 11:16 AM Reply Like
  • pat45
    , contributor
    Comments (391) | Send Message
    This will eventually or quickly drive up iron prices, watch favorite miners closely, they will bounce dramatically as iron very cheap.
    19 May 2014, 11:32 AM Reply Like
  • lowercherty
    , contributor
    Comments (2) | Send Message
    90 million tonnes of production lost per year is a drop in the bucket of the world market. World iron ore production pushes 3 billion tonnes a year and growing. While the production loss is good for non Indian iron ore producers, it probably isn't significant in terms of iron ore price.
    19 May 2014, 12:42 PM Reply Like
  • chunghk
    , contributor
    Comments (305) | Send Message
    CLF-Despite above, range bound $17-$22. Low China demand; dwindling iron ore price; fight between Gary & Dropping. Bound to stay stagnant. Dividend 3.30% foreseeable & constant. No more, hope or sudden surge. Thanks.
    19 May 2014, 01:11 PM Reply Like
  • talsar
    , contributor
    Comment (1) | Send Message
    What is vale contract price to provide china with iron ore surly it would be already set for 2-3 years so all this rise a fall in iron prices is meaningless
    19 May 2014, 06:19 PM Reply Like
  • deckster8
    , contributor
    Comments (35) | Send Message
    Much Fe sits in China as a result of speculators who have a 90-day cycle to borrow funds, buy Fe, use as collateral for additional funds, etc. What happens to Fe inventories when authorities impose a 60-day cycle? How significant a glut and downward price pressure?
    20 May 2014, 05:50 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs