The iron ore in recent months is simply crazy. As of October 20, the latest data from S&P Global Platts shows that the iron ore price index of 62% iron grade has been at a high level of more than $120 for two consecutive months. , During this period, the highest rushed to nearly 130 US dollars, breaking the highest record since February 2014.
Under this wave of major cycles, the iron ore giants have stabilized production, and the iron ore business performed strongly in the third quarter, which can be said to have made a lot of money.
Rio Tinto
Stable production and sales, Pilbara iron ore output hit a new high this year
On October 16, Rio Tinto Group released its production performance report for the third quarter of 2020. In the third quarter of 2020, Rio Tinto’s Pilbara mine produced 86.4 million tons of iron ore. Although it was down 1% year-on-year, it increased by 4% month-on-month, setting a single-season record this year. The total output in the first three quarters of 2020 totaled 247 million tons, a year-on-year increase of 2%.
According to data, in the third quarter, iron ore shipments in the Pilbara area of Rio Tinto were 82.1 million tons, down 5% year-on-year; Pilbara iron ore output was 86.4 million tons, down 1% year-on-year.
In terms of sales volume: in the third quarter of 2020, Rio Tinto's total iron ore shipment volume was 82.1 million tons. Due to the port's resumption of planned maintenance work, shipment volume decreased by 5% year-on-year and 5% month-on-month. The total shipping volume in the first three quarters of this year reached 241.7 million tons, which was basically the same as the same period last year. Rio Tinto claimed in the production and sales report for the third quarter of 2020 that the iron ore shipments from the Pilbara mine in 2020 will be 324 to 334 million tons, which has no significant change from the target of the data reported in the previous quarter.
Rio Tinto Group Chief Executive Officer JS Jacques said: "In the third quarter, most of our assets performed well and caught up with the progress affected by planned maintenance activities. The iron ore business performed outstandingly. We are still adapting. A new operating environment that coexists with the new crown epidemic (COVID-19). Our capital expenditure guidance targets and 2020 production guidance targets for major products remain unchanged."
Vale
Both production and sales are booming, and the output of S11D mining area reaches a new high
On October 19th, Vale released its third quarter report. The report shows that in the third quarter of 2020, Vale’s iron ore powder output reached 88.7 million tons, an increase of 21.1 million tons from the previous quarter. The northern system set a single-season output record of 56.9 million tons, with the highest output in August, reaching 19.7 million tons. The S11D mining area set a single-season output record of 24.4 million tons and a single-month output record of 8.3 million tons in September.
The overall performance of each operating area of the Southern System and the Southeastern System has improved, especially the Itabira integrated mining area and Timbopeba mining area (the mining area continued to operate for the entire quarter after it resumed operations in June), The Fazendo mine also resumed operations in July.
After mid-July, the daily iron ore output has generally remained at the level of about 1 million tons, and the output has shown consistency and stability for almost the entire quarter.
In the third quarter of 2020, Vale's iron ore pellet output reached 8.6 million tons, an increase of 21.1% from the previous quarter. This was mainly due to the increase in the supply of pelletized powder, especially the increase in the supply of pelletized powder from the Itabira complex, and the improved operating performance of the pellet plant.
In the third quarter of 2020, the sales of iron ore fines and pellets reached 74.2 million tons, an increase of 20.4% from the previous month, and the product premium was US$4.6/ton2. Since September, as Vale shifted its inventory to the entire supply chain, the logistics lead time between production and CFR (cost and freight) sales began to return to normal, and the monthly sales volume in September was 28.6 million tons. Sales in the fourth quarter of 2020 are expected to increase further. Vale will follow the method of maximizing efficiency and give priority to selling mixed mineral products in the company's product portfolio.
Vale’s chief financial officer Luciano Siani Pires said earlier this month that accelerating production in the second half of the year would enable the company to reach its annual target of 310 million tons, while CEO Eduardo Bartolomeo said last week that he was “very certain” that Vale’s output would be At the end of 2022 or early 2023, it will reach 400 million tons.
BHP Billiton
Stable production and sales, Jimblebar mine output breaks new high
On October 20th, BHP Billiton (BHP) released the production and sales report for the third quarter of 2020. The report showed:
In terms of output: In the third quarter of 2020, the iron ore output of Pilbara business was 74.15 million tons, a decrease of 2% from the previous month and an increase of 7% from the same period last year. The total iron ore output in the first three quarters of 2020 was 218 million tons, an increase of 7% year-on-year.
In terms of sales: the total sales of iron ore in the third quarter of 2020 was 73.36 million tons, a decrease of 5% from the previous quarter and an increase of 7% from the same period last year. Among them, the sales of fine ore was 48.39 million tons and the sales of lump ore was 17.06 million tons. The total sales volume in the first three quarters of 2020 was 219 million tons, an increase of 7% year-on-year.
According to the quarterly report this quarter, BHP Billiton's 2021 fiscal year (July 2020 to June 2021) iron ore target guidance volume of 276-286 million tons remains unchanged.
In terms of mining projects, the output of the Jimblebar mine in the West Pilbara area broke a new high. In the third quarter, the maintenance of the No. 3 unloader was completed as planned, and the maintenance of the No. 4 unloader will continue in the fourth quarter. At the same time, the transfer of MAC and South Flank mines may have a slight impact on production. In addition, the Samarco mine in Brazil is still in a state of suspension, and it still takes time to resume production.
Iron ore price forecast by various agencies
S&P Global Platts stated that it is optimistic about the market demand for Chinese steel. It is expected that China's steel demand will continue to remain high, and the high iron ore price situation will continue for some time.
The Western Australian government predicts that the average benchmark price of 62% iron ore from July 2020 to June 2021 is US$96.6/ton, higher than the previous fiscal year’s US$92.9/ton. However, with the recovery of iron ore production and supply in Brazil, it is expected that the benchmark iron ore price will fall back to $64/ton in June next year.
Goldman Sachs recently raised its fourth quarter iron ore price forecast to US$105/ton (previously estimated to be US$80/ton), raised its forecast for 2021 to US$90/ton (previously estimated to be US$80/ton), and raised its forecast for 2022 To US$75/ton (previously estimated to be US$70/ton).
Citi Research expects that benchmark iron ore prices will be in the range of US$100-120 per ton for the rest of this year.
Morgan Stanley predicts that iron ore prices will drop to around US$100/ton in the fourth quarter of this year due to falling demand, and will further fall to around US$81/ton in 2021.
UBS stated that with the recovery of Brazilian supplies, iron ore prices are expected to fall to around US$85 per ton in 2021, and that Brazilian supplies are recovering faster than global steel production.
Credit Suisse is more optimistic about the steel market, raising its global steel price forecast for 2021 by 7%, making it even more bullish on iron ore prices-the expected increase in the next three years will be between 17%-30%.
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