Australian Iron ore miners plunge amid a recovery in the supply chain

  • Apr 24, 2019 AEST
  • Team Kalkine
Australian Iron ore miners plunge amid a recovery in the supply chain

Iron ore Miners on the Australian Stock Exchange reacted over the rise in the ore supply across the globe, and share prices of various miners such as BHP Billiton, South32, Fortescue Metals, Rio Tinto plunged during the day session.

BHP Billiton (ASX: BHP): The share of the company started the day’s session at A$38.410, and plunged to mark the day’s low at A$37.930 before ending the day session at A$38.200, down 0.339% from its previous close.

South32 (ASX: S32) followed the same trajectory and started the day’s session at A$3.460 and plunged to mark a low of A$3.390 before ending the session at A$3.400, down 2.017% from its previous close.

Fortescue Metals Limited (ASX: FMG) opened at A$7.790, and the share prices fell significantly till A$7.565, before registering a close of A$7.600, down 1.81%.

Rio Tinto (ASX: RIO) also moved as the peers in the industry and marked a low of A$98.250 after starting the day’s session at A$100. The share prices of the company registered a close of A$98.390, down 0.83%.

Iron ore prices rose slightly with Iron ore fines 62% Fe (CME) surging from the level of $93.2 (Day’s close on 23rd April 2019) to the level of $93.29. The ore prices in China also rose slightly to end at RMB 629.00 (as on 23rd April), up by just 0.32% as compared to its previous close.

However, the market participants are now expecting increased supply in the global market, which could drag the prices of iron ore down; the prices increased previously over the supply shortage in the global market and the fall in steel and iron ore inventory in China.

In the recent scenario, the supply side is again picking up the pace, which could fill the supply gap created by the production loss from significant iron ore miners such as Vale, Rio Tinto, BHP Billiton, and Fortescue Metals, etc.

As per the data, eighty-seven vessels carrying 13.23 million metric tonnes of iron ore arrived across the significant Chinese ports from 15th to 22nd April, which marked an increase of 2.73 million metric tonnes as compared to the shipment across the ports in the previous week. The rise in shipment led the port inventory to grow across the major ports in east and north in China.

Iron ore shipments from Australian ports also increased, which initially decreased over the impact of the Tropical Cyclone Veronica. As per the data, the delivery from the Australian ports increased by 1.13 million metric tonnes and stood at 16.76 million metric tonnes from 15th to 22nd April. The increase in shipments is in line with the waned impact of the cyclone on the Port Hedland in the Pilbara Region.

Apart from the rise in the shipments from Australian ports, the Vale is also expected by the market participants to repair the supply gap. As per the data, Iron ore from Brazilian ports is expected to grow till 260,000 metric tonnes.

Market participants may monitor if the recovery in the supply chain exerts any pressure on iron ore prices with a correction in the prices.


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