Iron ore miners surge on record China steel production



Vivek Dhar from CBA said key drivers of the higher price were low iron ore inventories among Chinese steelmakers, combined with record Chinese steel production in April.

“Having record steel production means that demand for iron ore is solid,” he said.

In a new report Credit Suisse lifted its average iron ore price estimate for 2019 by 21 per cent to $US96 ($A138.94) per tonne.

“We have increased our iron ore price forecasts on the expectation of a 57 million tonne deficit this year. We expect China’s trading port stocks will be completely depleted when port stocks reach 80-90 million tonnes, likely in the third quarter,” it said.

Higher iron ore prices will generate billions of dollars more in free cash flow for Australia’s biggest iron ore miners Rio, BHP and Fortescue which were all higher on Friday. Rio Tinto shares were up 2.1 per cent to $101.35, BHP shares were up 2.5 per cent to $38.46 and Fortescue shares were 6.6 per cent higher at $8.95.


Vale said movement in the north slope of its Gongo Soco mine pit had been identified, and it was assessing potential impact from vibrations on the nearby Sul Superior dam.

In a statement on Thursday prosecutors from the Public Ministry of Minas Gerais, quoting information obtained from Vale, said if the movement in the north slope of the mine pit continued at its current speed, the collapse of the dam may occur between May 19 and 25.

Vale said the dam and mine pit were “under 24/7 monitoring”. Gongo Soco is a former iron ore mine which closed in 2016.

Vale has faced intense scrutiny since the January disaster, and its iron ore production is expected to be cut by tens of millions of tonnes this year. The Brumadinho incident occurred less than four years after the fatal Samarco dam collapse in Brazil, at a BHP/Vale joint venture.

A lawyer representing people suing BHP over the Samarco collapse, Tom Goodhead from SPG Law, said the Brumadinho disaster had “massively increased” his clients’ determination for a strong compensation result.

“Our municipal clients, obviously they’re municipalities but they’re all represented by mayors…and they want to obtain a result in this lawsuit which is going to be acceptable to their electorates and their electorates are extremely angry,” he said.

BHP did not respond to Mr Goodhead’s comments, but last week said it “intends to defend the claim”, which has been lodged in a British court.

Darren is the mining and agribusiness reporter for The Age and The Sydney Morning Herald.

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