Foreign supplies of the spread of the epidemic may be stored until they are carefully sorted out

At present, due to the international epidemic and economic uncertainty, the industry on the supply side of iron ore concerns ensued. Of national sealing the news that China, as a demand for iron ore power its industry concern about iron ore supply is aggravating, but according to iron ore in the past two weeks are the trends of the international market, the international iron ore market, especially the supply situation, or will be better than expected, even in the late iron ore port or there will be a tired library.

As a result of the global lockdown, production at iron mines in individual countries may be reduced to contain the spread of the coronavirus. Currently in the transocean market, it is estimated that the global production of about 18 million tons of iron ore may be interrupted, but for the main iron ore producing and exporting countries, Brazil, Australia, India, South Africa and other markets, the impact is not very big.

Brazil: the Brazilian government has declared mining a "necessary" industry in the country to keep its mining operations running during the novel coronavirus outbreak. The federal government believes that mining activities cannot be stopped even if local governments take measures to ban commercial activities and the movement of people, because mining is of vital importance to the country. In addition, the decree, signed by Brazil's energy and mining minister bento Albuquerque, requires that mining activities, including mining-related research, transportation and the sale of minerals, not be halted. The government's decision is important for mining companies, which fear workers and supplies of materials will not be able to reach the site.

So far, most of Brazil's mines are operating normally. However, in order to prevent the spread of the epidemic, some local governments have imposed restrictions on the movement of people and the passage of vehicles. The impact of the outbreak on local iron mine operations in Brazil is limited because Brazilian iron ore shipments to China have not been disrupted and Brazilian iron ore production has remained stable. Currently, the wet dressing plant at the vale Brucutu mine is dressing at a 40% capacity utilization rate, and it is also filtering some of the tailings from the Norte/Laranjeiras dam, which was rated as a level 1 risk (lowest risk level) on 2 December 2019. In order to increase the capacity utilization rate of the wet dressing plant at the Brucutu mine to 80%, Vale plans to use tailings treatment alternatives in the near future, i.e., optimized Sul DAMS to process the Norte/Laranjeiras tailings, prior to testing the geological performance of Sul DAMS and the operations team. It can be seen from Brazil's decision to actively deal with tailings that there is a potential international demand for iron ore at present and there is no strong control over the export of iron ore in Brazil.

In addition, there has been no news from Brazil of any local restrictions on iron ore exports, and Vale has benefited in recent days from the low interest rates of the Brazilian real against the dollar, since most of its revenues are in foreign currencies. As Brazil may enter the winter, the uncertainty of the epidemic will make the local economy very fragile, which may lead to an unexpected decline in domestic demand and domestic trade in Brazil. Brazil's government may try to ensure that iron ore exports benefit as much as possible because of internal instability in places such as Brazil.

Australia: the closure of individual iron mines in Canada and South Africa due to the coronavirus outbreak could boost local iron ore production in Australia, such as FMG. The reason is that iron ore operations in Australia have continued at normal levels after control bans were announced in parts of South Africa and Canada. FMG had previously said that because most of its workforce was based in western Australia, it would not be affected by travel bans and self-quarantine clauses that exempt mining workers. In addition, FMG had previously said it would not cut its annual target for shipments. At present, Australia's major iron mines are operating normally and are not affected by any disruption to iron ore production, labor shortages or iron ore exports.

India: for now, iron ore production in India's largest iron ore producing state, orissa, is unlikely to be affected by the shutdown to stop the spread of the coronavirus. Umesh Chandra Jena, co-director of the local mining industry, said the state produced 120 million tons of iron ore in the year to March 2019-20, up slightly from 118 million tons the previous year. In addition, the local government expects iron ore production to reach about 120 million tons in 2020/21. Production in orissa is expected to fall by more than 20% in fy20-21 as the coronavirus outbreak reduces local demand, yet India's steel mills are producing only about 60% or less of what their Indian counterparts normally do. In the case of the imbalance of iron ore supply and demand in India, the Indian government may introduce some measures to protect the economic interests of Indian miners.

South Africa: the local government of South Africa may give the green light to mining companies, foreign media said. ARM said on Thursday that it had received a green light from South African authorities to load iron ore into stocks at the joint venture mine in spite of the 21-day national coronavirus lockdown. The diversified mining company has now been authorised by the ministry of mines to operate its shipping stations at the Khumani and Beeshoek mines and to allocate iron ore from the mines' respective inventories. The move is likely to be part of South Africa's effort to keep the local economy and markets as stable as possible, but it seems likely that South African mining production will remain stable. In addition, South Africa's largest iron ore shipping port, saldanha port, has resumed operations at 7 am local time on March 30.

To sum up, the impact of the current epidemic on the global iron ore supply chain may be small, but it needs to be taken into account that in terms of iron ore demand, since the current epidemic in China is effectively controlled, the resumption of work and production of steel mills across the country is proceeding in an orderly manner. However, affected by the worsening international epidemic, the demand for iron ore in all countries except China will continue to decrease significantly under the circumstances of overall economic weakness, traffic control and shutdown of steel mills. Therefore, the global iron ore market may see an oversupply phenomenon in the later stage.

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Copyright©2019 wuxi xinke metallurgical equipment CO.,LTD. ALL RIGHT