Low steel demand, robust iron ore supply and elevated inventories at ports in China are putting pressure on the iron ore market
24 October 2024 - 10:17
byJacqueline Mackenzie
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Kumba Iron Ore’s Sishen mine. Picture: GETTY IMAGES/WALDO SWIEGERS
Kumba Iron Ore’s third quarter production increased by 3% compared with the second quarter and the group is on track to deliver its full-year 2024 guidance of 35-million to 37-million tonnes.
Sales for the three months ended September increased by 2% from a year ago, but were down 6% from the previous quarter as ship loading was affected by adverse weather conditions in July at the Saldanha Bay port, CEO Mpumi Zikalala said in a statement on Thursday.
“Given this, sales are expected to end the year closer to the lower end of our full-year 2024 sales guidance of 36-million to 38-million tonnes, subject to Transnet’s logistics performance which will include the annual maintenance shutdown in October,” she said.
Low steel demand, robust iron ore supply and elevated inventories at ports in China have continued to place pressure on the iron ore market. However, the iron ore market rallied in the last week of September, amid economic stimulus measures announced by the Chinese government and calls for countercyclical fiscal policies to stabilise the Chinese property market.
This resulted in a year-to-date average benchmark free-on-board (FOB) iron ore price of $90 per wet metric ton (wmt). Against this context, Kumba achieved an average realised FOB export price of $94/wmt, which is $4/wmt above the average benchmark price, reflecting the premium quality of Kumba’s iron ore products, Zikalala noted.
“In the longer term, as steel production shifts to direct reduced iron steelmaking, which has significantly lower emissions compared to the traditional blast furnace route, demand for direct charge materials such as Kumba’s high-quality iron ore lump, will grow rapidly.”
The resumption of Kumba’s ultra-high-dense-medium-separation (UHDMS) technology project announced on August 29 should treble the proportion of premium iron ore produced at the group’s world-class Sishen mine, ensuring that Kumba continues to play a key role in the green steel value chain, Zikalala said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Kumba third-quarter output rises 3%
Low steel demand, robust iron ore supply and elevated inventories at ports in China are putting pressure on the iron ore market
Kumba Iron Ore’s third quarter production increased by 3% compared with the second quarter and the group is on track to deliver its full-year 2024 guidance of 35-million to 37-million tonnes.
Sales for the three months ended September increased by 2% from a year ago, but were down 6% from the previous quarter as ship loading was affected by adverse weather conditions in July at the Saldanha Bay port, CEO Mpumi Zikalala said in a statement on Thursday.
“Given this, sales are expected to end the year closer to the lower end of our full-year 2024 sales guidance of 36-million to 38-million tonnes, subject to Transnet’s logistics performance which will include the annual maintenance shutdown in October,” she said.
Low steel demand, robust iron ore supply and elevated inventories at ports in China have continued to place pressure on the iron ore market. However, the iron ore market rallied in the last week of September, amid economic stimulus measures announced by the Chinese government and calls for countercyclical fiscal policies to stabilise the Chinese property market.
This resulted in a year-to-date average benchmark free-on-board (FOB) iron ore price of $90 per wet metric ton (wmt). Against this context, Kumba achieved an average realised FOB export price of $94/wmt, which is $4/wmt above the average benchmark price, reflecting the premium quality of Kumba’s iron ore products, Zikalala noted.
“In the longer term, as steel production shifts to direct reduced iron steelmaking, which has significantly lower emissions compared to the traditional blast furnace route, demand for direct charge materials such as Kumba’s high-quality iron ore lump, will grow rapidly.”
The resumption of Kumba’s ultra-high-dense-medium-separation (UHDMS) technology project announced on August 29 should treble the proportion of premium iron ore produced at the group’s world-class Sishen mine, ensuring that Kumba continues to play a key role in the green steel value chain, Zikalala said.
MackenzieJ@arena.africa
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