Jun. 27, 2014, 2:39 PM
- Glencore (GLCNF, GLNCY) has told the government of Guinea that it is interested in rights to develop the northern concession of the Simandou project, one of the world's most sought-after iron ore deposits, WSJ reports.
- BHP Billiton (BHP) and Arcelor Mittal (MT) also reportedly have notified Guinea that they could be interested in taking part in a tender.
- Glencore has little exposure to iron ore, but has said it isn't seeking out the kind of long-term investment required by Simandou, which would require billions of dollars in investment before making a profit.
- Earlier this year, the government revoked the license previously held by Vale (VALE) and BSG Resources, alleging BSG obtained the rights through corruption; Simandou's southern concession is being developed by a consortium led by Rio Tinto (RIO).
Jun. 23, 2014, 2:16 PM
- Vale (VALE +2.2%) is higher after China reported better than expected June flash manufacturing PMI data, but while iron ore prices may incrementally firm up from Chinese demand, Credit Suisse cuts its iron ore price outlook as it does not foresee any real strength ahead without the kind of broad based stimulus package the current Chinese administration has disavowed.
- The firm now forecasts iron ore to average only $90/ton in H2 of this year, and expects prices to average $89/ton next year and $87/ton in 2016.
- Plus, the big three Australian miners - Rio Tinto (RIO), BHP and Fortescue Metals (FSUMF) - are racing to expand production this year before Vale begins to contribute more meaningfully in 2015, meaning plenty of overseas supply should be expected.
Jun. 12, 2014, 8:28 AM
- Morgan Stanley cuts its iron ore price estimate for this year and foresees a further drop in 2015, as a seaborne surplus grows faster than expected and the level of cost support at Chinese producers declines.
- Prices are expected to average $105/ton this year vs. $118 forecast in May and $135 in 2013, and average ~$90/ton in 2015, 21% below an earlier estimate.
- Iron ore has dropped below $92 for the first time since 2012 as mining companies boost output, betting that rising exports to China would more than offset lower prices.
- The firm downgrades Vale to Equal Weight from Overweight with a $15.20 price target.
- RIO -2.9%, CLF -2.8%, VALE -1.3%, BHP -1.2%, MT -1.2% premarket.
Jun. 10, 2014, 12:49 PM
- Iron ore prices have plunged by a third this year, hovering at ~$94/ton this week, thanks to the rapid growth in supply from Australia and other exporting nations, but Citi believes the supply surge is peaking in Q2 and that H2 of this year should see a leveling off in supply.
- While UBS is cautious, Citi says iron ore can find price support at $90/ton and that it sees prices back to $100/ton in Q4; if iron ore were trading at $90, China - a high-cost market - would have to cut 25% of its production, and other producers would have to curtail as well, Citi says.
- Iron ore miners are lower today: VALE -0.6%, RIO -1.1%, BHP -0.5%, CLF -0.7%.
Jun. 9, 2014, 11:28 AM
- Even as Rio Tinto (RIO -0.2%) has risen 23% in the past year while Vale (VALE +0.8%) has slipped 9%, and Rio trades at 10x forward earnings vs. Vale's 6.5x, analysts at Credit Suisse does not see a bargain opportunity for investors eyeing Vale.
- The firm sees Rio as the safer bet between the two, figuring investors prefer to see the money up front that at a time when iron ore pricing is soft.
- Also, Rio already has gone through large capital investments and is expected to step up sales volumes this year, but Vale is where Rio was a year ago and is not expected to ramp up production until 2016.
Jun. 6, 2014, 3:59 PM
- Petrobras (PBR +7.6%) leads Brazilian stocks higher as support for Pres. Rousseff continues to shrink according to a new opinion poll.
- Brazil's real rose for a third straight day in the longest stretch of increases in almost a month, as speculation grows that Rousseff will face a runoff after the October election.
- Other big Brazilian gainers: EDN +7.6%, EBR +6.6%, BBD +4.9%, ITUB +4.2%, CIG +3.6%, VALE +2.7%, BSBR +2%, ELP +1.4%.
Jun. 5, 2014, 3:59 PM
- Joy Global (JOY +6.7%) powers to its highs of the day after reporting FQ2 earnings that reflected the global mining equipment slowdown but topped low expectations and backing its FY 2014 guidance.
- JOY said in its earnings conference call that its deal with Mining Technologies will add to its underground hard rock mining growth prospects.
- Joy also sees growth in the oil sands market, particularly in Canada, which it said represents the largest unconventional source of oil production over the next 20 years.
- Global mining peers also are higher: CAT +2.6%, VALE +1%, BHP +0.7%, RIO +0.7%.
Jun. 2, 2014, 6:49 PM
- Petrobras (PBR) says its total production for April rose only 0.4% from March, while Brazilian liquids production increased just 0.3%.
- Production was hindered by planned maintenance shutdowns; nevertheless, the company's 7.5% 2014 output growth target will have to be achieved in H2, Raymond James notes in forecasting PBR to be able to achieve just half its target.
- PBR’s ADRs fell 1.8% today, while Brazilian iron ore producer Vale (VALE) rose 0.7% today after China reported its manufacturing activity in May reached a five-month high.
May. 28, 2014, 12:10 PM
- Iron ore prices are unlikely to rise over the next three months from their current trough, the lowest in nearly two years, China's top economic planning agency says.
- "The period of China's high steel demand has passed, and iron ore demand is now rising at a slow pace of 3%-4% annually," the agency says.
- Iron ore prices sank below $100/metric ton this week for the first time since September 2012, down 25% YTD to a low of $97.
- Iron ore prices depend almost entirely on demand from China, which consumes two thirds of global ore supply and makes nearly half the world's steel.
- Iron ore miners are broadly lower: CLF -3.6%, RIO -2.5%, BHP -1.2%, VALE -0.7%.
May. 19, 2014, 8:18 AM
- 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.
May. 14, 2014, 9:50 AM
- Rio Tinto (RIO +0.7%) seeks to assure the government of Guinea that its dispute with Vale (VALE) over rights to the world’s biggest untapped iron ore deposit won’t affect its plan to build a mine estimated to cost $20B.
- Rio reportedly is telling officials that the dispute is a damages claim and not a claim for reinstatement of the mining titles in question, and will not impede the timely development of the Simandou project.
- Analysts say the mine could produce as much 100M metric tons/year.
May. 9, 2014, 10:32 AM
- Iron ore fell to $103.7/ton yesterday, the lowest since Sept. 2012, and Goldman Sachs believes $100/ton will become the new norm by year's end because of oversupply, seeing the global surplus jumping from 14M tons last year to 77M tons this year and 145M tons in 2015.
- But J.P. Morgan remains bullish on shares of Vale (VALE -0.4%), even as it lowers its target price to $19 from $22.50, seeing "no cause for concern for Vale’s investment case, as the prices do appear to follow the spot price trend over multiple quarters, removing the Q/Q volatility.”
May. 8, 2014, 9:46 AM
- Nickel prices reach two-year highs after New Caledonia's government ordered Vale (VALE -0.4%) to suspend activity after a spill at a local site.
- Nickel surged 41% in London trading this year after leading global miner Indonesia barred exports of raw ores in January.
- With the nickel market already tightening on Indonesia and possible sanctions against Russia, the news adds to the general sense that the market is facing a supply shortage over the coming months, analysts say.
- ETFs: JJN, NINI
May. 7, 2014, 2:45 PM
- BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz, says it is initiating legal action against Guinea to stop the country from stripping it of the prized Simandou iron ore deposit.
- Last week, Rio Tinto (RIO), the concession's former owner, filed a lawsuit against BSG, Steinmetz and BSG's former Guinean joint venture partner Vale (VALE), alleging they colluded to rob it of half its prior rights to Simandou.
- BSG is seeking to warn off any rivals - including Rio and Vale - from taking control of its share of the deposit, valued at ~$5B.
Apr. 30, 2014, 2:35 PM
- Rio Tinto (RIO) is suing Vale (VALE) and Israeli billionaire mining investor Beny Steinmetz, alleging they conspired to steal mining rights to the highly prized Simandou iron ore concession in Guinea by bribing officials.
- Rio lost half its interest in the property - valued in the billions of dollars - in 2008, when the Guinean government said it planned to give the stake to Steinmetz's BSG Resources, which paid a $200M bribe to the country's former mining minister, Rio claims; BSGR partnered with Vale to bring in iron mining experience and resources to develop the mine.
Apr. 30, 2014, 11:14 AM
- Vale (VALE -1.3%) reports a 19% Y/Y drop in its Q1 profit to $2.52B, slightly below the $2.59B analyst consensus, as its realized prices for iron ore fell to a four-year low.
- Q1 net revenue fell 11% to $9.5B, the lowest level for any three-month period since Q1 2010; Brazil's seasonal rains limited production, typical for Q1, but lower prices for iron ore also chopped $1.3B from Vale's sales Q/Q.
- Revenue would have fallen further if it were not for a 9.6% growth in iron ore output to 71.1M metric tons, the best Q1 result since 2008 but 13% lower Q/Q.
- Vale received an average $90.52/ton of iron ore it sold, down 19% Y/Y and the company's lowest realized price since 2010.
- EBITDA fell 22% Y/Y to $4.06B.
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