Vale CEO sees iron ore prices at USD 130 to USD 160

Mr Roger Agnelli CEO of Brazilian mining giant Vale said on Monday that he expects iron ore prices to average between USD 130 per tonne to USD 160 per tonne this year and expects a similar range in 2011 Agnelli told reporters at a news conference in New York that the range depends on issues like freight costs and quality.

Source: Reuters

Karnataka ore ban hits biz of New Mangalore Port

The Karnataka government’s ban on mining and movement of iron ore in the state has impacted the business of New Mangalore Port Trust (NMPT). Along with Tadiri and Billikere, NMPT ships close to a half of Karnataka’s 30 million tonne of iron ore. Tadiri and Billikere are minor ports and normally remain shut during monsoon.
A recent report on the port sector by broking house Motilal Oswal notes that while other ports, notably Ennore and Kolkata, reported a healthy 25%-plus year-on-year growth in cargo in September, Kandla and NMPT were the laggards, with the latter being the worst performer. NMPT accounts for 5% of the country’s cargo composition. The report says iron ore shipments from India were 4.5 million tonne in September 2010 compared to 5.2 million tonne in September 2009.

Global wheat output to hit surplus next year

Global wheat production will return to surplus next year, but not by enough to refill inventories by more than a fraction, Macquarie has said. The Australia based banker also forecasted that Chicago prices will remain above $6 a bushel for at least two years.
The bank forecast a jump of more than 5% in wheat production in 2011-12, the sowings for which have begun in northern hemisphere countries, as growers raise plantings to capitalise on firmer prices.
"European Union, US and Canadian farmers are expected to expand wheat plantings at the expense of other crops," Macquarie said.

Congested Asian ports struggle to sate Chinese demand

Australia, India and Indonesia are under the gun to expand port capacity so exporters can cash in on China's commodities boom or face losing billions of dollars in business to other markets. China, already the top iron ore importer and coal user, is expected to consume even greater amounts of commodities over the next few years to help fuel the rapid growth of the world's second largest economy.
But major congestion at ports from Newcastle to Paradip to Balikpapan could force the world's most populous country to turn to imports from suppliers further afield, such as the United States and Canada, which don't have the same bottlenecks.
"It seems that (Asia Pacific) port capacity is constantly running behind actual demand," said Klaus Nyborg, chief executive of Hong Kong-based dry bulk shipping firm Pacific Basin, one of Asia's biggest small-sized shipowners.

WEEK41 - Dry Cargo Market “Highlights” – 08-October-2010 - 15-October-2010

Yet another week passed by with China being the drive force of the main size segment the Capes. All indices went down during this week with Capes still moving positively and the reason for this is the continuing growth in demand for iron ore imported in China.  Yes that’s no news one would say and that is absolutely right. We are not happy to be forced to repeat the same old song every week, but this status quo could also be assuring depending on how you might want to see it. Further in this report we will explain what we feel about China and what we may call “welcome to the comfort zone”…
To get a peek at how this week did not have the same number as period and timecharter fixtures in the Cape sector, as we have more or less 12, but all period and T/C fixtures for the first 15 days of October have reached 38 in total, one more than the 37 we had recorded for last September. This is surely a sample of the increased demand and the heating up of the Capesize market that managed to raise the average daily performance to a level over $40,000 dollars per day. We shall see in detail how the daily earnings of all sizes of ships moved this week, however briefly similar to last week the Capes is once again this weeks big winner with all the other smaller sizes and especially the Panamax size segment performing the worst.

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WEEK 41 DRY BULK ANALYSIS

BHP Billiton and Rio Tinto Terminate the Iron Ore Production Joint Venture

BHP Billiton and Rio Tinto signed core principles to establish a production joint venture covering the entirety of both companies’ Western Australian Iron Ore assets.  This resulted in the signing of definitive agreements on 5 December 2009. The completion of these agreements was subject to a number of conditions, including regulatory approvals.
Since the agreement was signed it has become increasingly apparent that regulatory approvals of the joint venture are unlikely to be achieved.  Consequently, BHP Billiton and Rio Tinto have reluctantly agreed to dissolve the proposed joint venture.

Iron Ore-Index near 5-month top, up for 8th straight session

Iron ore prices rose for an eight consecutive session on Friday to their highest in nearly five months, marking their longest winning streak since March on strong Chinese demand. Chinese steelmakers have resumed buying supplies as government-enforced curbs on production eased and mills stockpile iron ore ahead of winter. But the surge in iron ore prices coincides with falling steel rebar futures in Shanghai SRBc8, suggesting market players may soon put the brakes on the iron ore rally given the hazy outlook for steel demand, with China bent on taming its red-hot property market. "The recent rises in iron ore prices, we think, will be short lived," said Judy Zhu, commodity analyst at Standard Chartered Bank. "The price gains have been driven by Chinese mills' stockpiling, but I do not expect them to stockpile a huge amount of it when domestic steel demand remains so-so." Industry data showed crude steel output in China, the world's biggest producer, fell to about 48.54 million tonnes in September from 51.64 million tonnes in August after Beijing curbed production to meet a year-end energy efficiency target.

Currency wars to propel Commodity Super Cycle

While the United States remains the world's No.1 economy, it is increasingly feeling the heat of the Chinese dragon breathing down its neck, writes Gary Dorsch, editor of Global Money Trends. At the beginning of the twenty-first century, the US economy was eight times larger than China's – a decade later the figure was down to three times. China's $5 trillion economy has eclipsed Japan, Germany, France and Britain, to become the second-biggest, after three decades of blistering growth, and is now within reach of overtaking the US within 10 years. With China's economic growth rate at 10% and the US economy struggling at 1.5% growth – this long-term prediction doesn't sound that far-fetched.
China, with 10 times Japan's population, has long been expected to catch up with its neighbor. But the global crisis and Japan's sluggish growth brought that point forward by many years. China has emerged to become the world's largest exporter, overtaking Germany, which held the title since 2002. Factories employing low-paid workers to assemble iPods, computers, shoes, and toys are leading the boom. China has also passed the US as the world's largest auto market and producer. Two decades ago, a car industry barely existed in China.

Fortescue Metals Iron Ore Shipments Exceed Guidance

Fortescue Metals Group Ltd., Australia’s third-biggest producer of iron ore, said first- quarter shipments rose a better-than-expected 6 percent as production increased. The company’s share of shipments was 10.1 million metric tons in the three months ended June 30, from 9.5 million tons a year ago, Perth-based Fortescue said today in a statement. It had forecast 9.5 million tons.
Fortescue said this week it had agreed a $2.04 billion loan to refinance debt in order to pursue expansions. Production will continue to operate at an annual rate of 40 million tons until February, when it will rise to 55 million tons, the company said.

Q+A-What's next for troubled RIO-BHP iron ore JV?

A $116 billion iron ore joint venture between Rio Tinto and BHP Billiton has suffered a blow after German regulators said they would block it, foreshadowing a rejection by the European Union Combining their vast Australian iron ore mining operations would surpass Brazil's Vale in size, producing a combined 385 million tonnes of ore initially and aimed at saving $10 billion in costs.
But Germany's competition watchdog said it would prohibit the deal and sources said regulators from the European Union, deemed the biggest hurdle to the venture, are set to say the merger could hurt competition.
A leak of Rio Tinto boardroom discussions earlier this month indicated the company was determined to walk away from the venture.

Cargill Profit Surges 68 Percent As Volatile Grain Markets Boost Trading

Cargill, Inc., said quarterly profit surged 68 percent, to $883 million, helped by volatile grain markets that boosted trading revenue for one of the world’s largest agricultural companies Results in Cargill’s origination and processing business, which includes commodity trading, rose “significantly” in the quarter, the Minneapolis-based company said in a statement today. That reflected “renewed market volatility and changes in trade flows (that) created opportunities for trading and for serving customers' price risk and raw material needs,” Cargill said.

BHP-Rio antitrust report expected soon

There was no surprise for Rio Tinto and BHP Billiton in a report saying the European Commission would soon announce the result of its antitrust investigation into their proposed $US116 billion ($A118 billion) iron ore production joint venture in the Pilbara.

The joint-venture proposal has a December 31 deadline from the companies and has been under investigation by the commission since being announced in June last year.
Both companies have also indicated previously that they expect to hear back from the regulator in the second (calendar) half of this year. Even so, BusinessDay reported last week that Rio's board had already begun planning the best way to announce that the joint venture would not proceed due to unacceptable conditions likely to be imposed by antitrust regulators.

China iron ore concentrates price rises again in few regions

It is reported that iron ore concentrate prices rises again. 1. In Liaoning.Iron ore concentrates price went up by around CNY 30 per tonne during the first few days of the national holiday. But it became steady in the last few days of the holiday with enquires increased and good transaction. Local steel mills sudden purchases increase promoted the market activity, and miners were busy with the production and sales. Recently, local steel mills increased the purchase price by CNY 30 per tonne and today the market also increase by CNY 20 per tonne to CNY 30 per tonne.

Shandong to invest RMB 100 bln in coal industry by end of 2015

The Coal Industry Bureau of Shandong Province announced plan to inject more than RMB 100 billion into coal industry by the end of the 12th five-year plan starting from 2010 to 2015, sources reported.
In the period, the province hopes to kick off construction on 16 collieries with a designed annual output capacity totaling 12.6 million tons and to put 18 mines into operation to add capacity of 16.65 million tons.
The total capacity of Shandong is expected to maintain around 150 million tons of coal in the next 20 years.
However, Wang Liting, deputy director of the coal industry bureau, said that the province has 935 coal developers, an amount 18.7% more than the planned figure in the province, adding that Shandong will wash out backward capacity in the future to optimize the coal industrial structure.

Source: China Knowledge

India's sugar supply to ease global prices

Peaked sugar global market is expected to be pacified with the supply of sugar from India. Sugar production in India is projected to touch 25.5 million tons thanks to favorable monsoon rains.
The industry opined that the country could export three million tons of surplus sugar in the current marketing year.
With an expected sugar output of 25.5 million tons and the carryover stocks of 5.8 million will facilitate to ship around three million tons of surplus sugar this year, Indian Sugar Mills Association Director General Abinash Verma was quoted by Dow Jones Newswires.