Tuesday, December 17, 2013

Seasons Greetings

In warm appreciation of our association during the past year, we extend our very best wishes for a happy holiday season and a Happy New Year 2014!

Monday, December 2, 2013

Premium hard coking coal spot prices drop $8 in November

The hard coking coal market saw little movement on Friday November 29, with slack demand and plentiful supply continuing to put pressure on prices.

The value of premium Australian material has slid by about $8 per tonne cfr China since the start of the month.

Steel First’s cfr Jingtang premium hard coking coal index stood at $158.30 per tonne on November 1. Today, November 29, it was calculated at $150.32 per tonne.

The index showed a $0.79 increase from levels seen on Thursday, however.

Premium hard coking coal prices fob DBCT Australia were calculated at $140.78 per tonne, up by $0.84 per tonne from Thursday.

The price for hard coking coal cfr Jingtang stood at $140.88 per tonne on Friday, down by $0.09 per tonne from Thursday.

Hard coking coal fob DBCT was $128.84 per tonne, up by $0.04 per tonne on the day.

The past week has seen prices regain some stability. Levels are expected to hold steady for the time being, while both sellers and buyers remain on the sidelines.

Several trading sources suggested that there may be a small wave of restocking at ports before the Chinese New Year at the end of January, but a mill source said this would be unlikely as the tight credit situation towards the year-end leaves mills with little cash in hand.

Most market participants are still taking a wait-and-see stance. Prime hard coking coal from Liulin, in Shanxi province, was reported quoted at 1,100 yuan ($179) per tonne ex-works inclusive of VAT, up by 10 yuan ($2) from a week ago.

The most-traded May coking coal futures contract on the Dalian Commodity Exchange closed at 1,113 yuan ($182) per tonne on Friday, edging up from Thursday’s close of 1,112 yuan ($181) per tonne.

The most-traded May coke contract closed at 1,616 yuan ($264) per tonne on the same exchange, down by 1 yuan ($0.16) from the previous day’s close.

Rio Tinto's 360-million-tpy expansion in Pilbara will cost much less

Rio Tinto, the world’s second-largest iron ore miner, is going ahead with its expansion in Australia to 360 million tpy at a “significantly lower capital cost per tonne than originally planned”.

“The breakthrough pathway we have identified, combining brownfield expansions and unleashing low-cost productivity gains, means we will deliver the expansion at an estimated capital cost of more than $3 billion below previous expectations,” its ceo Sam Walsh announced on Thursday November 28.

The majority of the growth, from a base run rate of 290 million tpy by the end of first half of 2014 to 330 million tpy in 2015, will be delivered in the next two years.

A series of low-cost brownfield expansions will bring on early tonnes to feed the expanded infrastructure currently being developed and Rio Tinto has on Thursday approved a capital expenditure of $400 million to support the brownfield expansions.

Mine production capacity will increase by more than 60 million tpy between 2014 and 2017.

Rio Tinto is still evaluating its options to optimise the next stage of “the 360 programme”.

It said expansions will be achieved primarily through a combination of expanding production at existing mines and securing further low-cost productivity gains, including the greenfield Silvergrass mine.

The investment decisions on the greenfield Silvergrass and Koodaideri mines, in Western Australia, have been deferred until the third quarter of 2014 and until 2016, respectively, at the earliest, due to the early tonnes from the brownfield expansions, Rio Tinto said.

The phase two expansion for port, rail and power infrastructure to achieve the 360 million tpy output is scheduled for completion in the first half of 2015.

The expansion is subject to government and joint venture approvals.

“This investment is driven by the attractive long-term fundamentals for iron ore which are underpinned by urbanisation and income growth in the developing world, particularly China. By delivering these additional tonnes we will capture a greater share of demand,” Andrew Harding, Rio Tinto Iron Ore’s ceo, said.