The spot price of iron ore roared ahead on Wednesday despite all three of the biggest producers of the steelmaking material reporting record-setting output growth.
The 62% Fe import price including freight and insurance at the Chinese port of Tianjin added $2.10 or 4.1% to $52.90 a tonne on Wednesday, the highest since end-March according to data provided by The SteelIndex. The iron ore price has recovered 13% since hitting record lows at the beginning of April, but remains down 25% so far in 2015 after almost halving last year.
The jump in the Metal Bulletin’s benchmark 62%-index was even more spectacular tracking gains of 5.9% at the ports of Qingdao-Rizhao-Lianyungang in China to $54.04 a tonne on Wednesday, a four week high. MetalBulletin’s 65% Brazilian index soared $4.00 to a five-week high of $62 a tonne, nearly $7 higher than its record low.
The Big Three iron ore miners – Vale (NYSE:VALE), Rio Tinto (NYSE:RIO) and BHP Billiton (NYSE:BHP) – announced record production numbers on Tuesday and Wednesday, emphasizing the devastating effect a surge of new supply has had on the market just as demand from top consumer China is softening.
BHP isn’t putting the brakes on production growth – just making the most of its installed infrastructure to slash costs further.
Global number one producer Vale shipped 77.4 million tonnes in the first quarter, up 4.5% from a year earlier. The figure includes 2.9 million tonnes the Brazilian miner acquired from third parties, a move that suggests the company is willing to deal with short-term price pain in order to recover market share from its Australian rivals.
Vale is expected to ship 340 million tonnes this year, more than 20 million tonnes greater than last year. After lagging the expansion of Australian producers during the height of the boom, Vale is catching up fast with its longer term ambitions of over 400 million tonnes a year. The Rio de Janeiro-based firm’s American Depository Receipts trading in New York surged on the news adding 8.8%.
Vale’s results came just a few hours after BHP Billiton , the world’s third-placed iron ore miner, announced it produced 59 million tonnes of iron ore in the three months through March, up nearly one-fifth on the same period a year earlier and 5% on the preceding quarter.
For the rest of this article, click here: http://www.mining.com/iron-ore-price-rockets/