BHP aiming to hit top of iron ore production guidance

: Metals
21/04/21

UK-Australian resources firm BHP expects to come in at the top half of its iron ore production guidance of 245mn-255mn t on an equity basis for the fiscal year to 30 June, after a strong first nine months in Western Australia (WA) and the restart of the Samarco operations in Brazil.

The increased confidence comes despite a 4pc fall in WA production on a 100pc basis to 66.7mn t during January-March from 70.41mn t for October-December because of wet weather and maintenance at the ore handling plant and the stacker at the Newman mining hub, as well as tie in-activity at Mining Area C.

The firm's WA mines must produce at least 69.7mn t during April-June to hit the top half of BHP's 276mn-286mn t target for WA iron ore production on a 100pc basis for 2020-21. This should be achieved given that the firm produced 75.59mn t at its WA operations during April-June 2020, which if repeated would put BHP ahead of its guidance. BHP shipments of iron ore rebounded in the week to 17 April after heavy rain affected exports at the start of the month.

April-June is typically the strongest production quarter for BHP's WA iron ore operations as it follows the end of the Pilbara wet season and is the final quarter in the firm's fiscal year. But skills shortages could affect production this year, particularly as BHP begins commissioning its 80mn t/yr South Flank mine during the quarter. The company is investing $3.06bn to develop South Flank to replace production from its Yandi iron ore mine, aiming to increasing the overall grade of its iron ore blends.

BHP increased its production guidance by 1mn-2mn t in January to account for the restart of its Samarco joint venture in Brazil with domestic mining firm Vale. Samarco has produced 915,000t of pellet since one of the concentrators restarted in December and is expected to produce 2mn-4mn t by the end of June, contributing 1mn-2mn t to BHP's total production.

Production eased at Jimblebar and Newman during January-March compared with October-December, while Mining Area C production increased despite tie-in activity.

BHP rebuilt some WA stocks during January-March, having drawn down on them in October-December.

Argus last assessed the ICX iron ore price yesterday at a new high of $188.70/dmt cfr Qingdao on a 62pc Fe basis, up from $167.45/dmt on 1 April and up from $119.20/dmt six months earlier.

By Jo Clarke

BHP iron ore sales					(mn wmt)
	Jan-Mar 2021	Oct-Dec 2020	Jan-Mar 2020	Jul-Mar 2020-21	Jul-Mar 2019-20

Lump	15.6	16.7	15.6	49.4	46.4
Fines	42.9	46.1	44.8	137.5	136.1
Total	58.5	62.8	60.4	186.8	182.4
Total (100%)	66.0	70.8	68.4	210.2	206.2
Source: BHP

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24/12/26

Viewpoint: Real, tariffs to hit Brazil steel imports

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China's GFEX launches polysilicon futures contracts

24/12/26

China's GFEX launches polysilicon futures contracts

Beijing, 26 December (Argus) — China's Guangzhou Futures Exchange (GFEX) has launched futures contracts and options for polysilicon today. This is the third contract that GFEX has launched, following the launch of its contracts for silicon metal in December 2022 and lithium carbonate in July 2023. The launch of polysilicon contracts is aimed at easing a supply surplus and ensuring market development, given increasing new capacities at polysilicon producers and lower-than-expected demand from the downstream silicon wafer industry in the past two years, according to market participants. The new contracts are for benchmark N-type polysilicon and substitute P-type polysilicon. The exchange has set a premium of 12,000 yuan/t ($1,644/t) for the N-type over the P-type. It is offering seven contracts starting from June 2025 until December. The most-traded June contracts for N-type polysilicon on the GFEX closed at Yn41,570/t on 26 December, up from the launch price of Yn38,600/t, with trading volumes totalling 301,655 lots, equivalent to around 905,000t. GFEX has established delivery points for the new contracts in eight provinces, including Inner Mongolia, Sichuan, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang. Output and consumption in these regions account for 93.1pc and 91pc of the country's total output and consumption respectively, according to GFEX. South China-based GFEX launched in April 2021 and is partly owned by China's four operational futures exchanges — the Shanghai Futures Exchange, Zhengzhou Commodity Exchange, Dalian Commodity Exchange and the China Financial Futures Exchange — with each holding a 15pc stake. Market reaction Some market participants expect the new futures contracts will ease pressure from ample spot inventories and shore up spot market sentiment in the coming months. But the market has yet to see immediate effects on the first trading day. Argus -assessed domestic prices for 5-5-3 grade silicon metal — a key feedstock in the production of silicon powder, which is the feedstock for polysilicon — held at Yn11,200-11,400/t delivered to ports on 26 December, unchanged from 24 December given limited buying interest from consumers. The most-traded February contracts for 5-5-3 grade silicon on the GFEX closed at Yn11,190/t on 26 December, down from Yn11,585/t on 25 December. China is the world's largest polysilicon producer, producing 1.74mn t during January-November, up by 33pc from a year earlier, according to data from the China nonferrous metals industry association (CNIA). It has an production capacity of over 2mn t/yr, according to industry estimates. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s crude steel output to recover in FY2025: IEEJ

24/12/26

Japan’s crude steel output to recover in FY2025: IEEJ

Tokyo, 26 December (Argus) — Japan's crude steel output is expected to recover during April 2025-March 2026, given higher output in wider domestic industries, according to government affiliated think-tank the Institution of Energy Economy Japan (IEEJ). The country's crude steel output will increase by 4.1pc on the year to 86.5mn t in 2024-25, according to the IEEJ's projection on 24 December. This will mark the first year-on-year growth in four years. A recovery is mostly attributed to an uptrend in wider domestic industrial sectors including automobile, electric and industrial machinery, IEEJ said. It sees domestic car output increasing by 1.8pc to 8.9mn units from a year earlier. IEEJ did not provide further details, but it suggested that expanding investment for digital and green transformation will underpin the steel demand throughout the period. The think-tank also predicts that the country's steel product exports will increase by 1.2pc on the year following an upward trend in the global manufacturing sectors. Japan delivered around 32mn t of steel products overseas during 2023-24, according to the industry group the Japan Iron and Steel Federation (JISF). The country's crude steel output has been sluggish throughout 2024, partly owing to weak demand from the construction and automobile sectors. Rising material costs and labour shortages have led to fewer construction projects in the country, weighing on steel demand. Operational suspensions at major auto manufacturers including Toyota and Daihatsu, following alleged false reporting on safety test results, also pressured steel demand. This partially led to the tenth consecutive month of year-on-year decline in booked orders of ordinary steel for car use in October, according to JISF. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US tariffs, new EAFs may alter scrap flows

24/12/24

Viewpoint: US tariffs, new EAFs may alter scrap flows

Pittsburgh, 24 December (Argus) — A wave of new electric arc furnace steel mills coming on line next year could transform scrap flows in North America, while looming US import tariffs could stunt cross-border trade. Six steel mills in the US and Canada, accounting for about 9.9mn short tons (st)/yr of electric arc furnace (EAF) production, are ramping up from late this year or scheduled to start up in 2025. The new EAFs, mostly along the Mississippi River and in Ontario, could be magnets for scrap and reshape flows across the southeast, Midwest and Canada, as scrap-fed EAF steelmakers continue to expand their role in North America, which was historically dominated by coal and iron ore-fed blast furnaces. Although some scrap dealers are optimistic about markets in the new year, market participants are carefully monitoring the effect president-elect Donald Trump's hawkish trade policies could have on scrap trading. Trump has pledged to impose 25pc tariffs on US imports from Canada and Mexico that could further shift North American scrap flows. Canada is the largest shipper of ferrous scrap into the US at an average of 3mn metric tonnes (t)/yr since 2021. Prime scrap imports between January and October this year averaged 47,000t/month, while shred imports averaged 70,000t/month, US customs data shows. The import tax would drive up the cost of Canadian scrap for US buyers and potentially reduce supply available to steel mills in the Midwest. Scrap traders noted that Trump can be unpredictable and may be using the threat of tariffs as leverage. "I'm pretty tepid on the first quarter," one Midwest dealer said. "People are trying to figure out how serious Trump is on tariffs." New EAFs to drive scrap demand The new scrap-fed EAFs in North America include Algoma Steel in Ontario, Hybar in Arkansas, and Nippon Steel's and ArcelorMittal's joint venture in Alabama. US Steel's Big River Steel began melting scrap at its second Arkansas EAF in October. EAF steelmaker Hybar plans to open its 630,000 st/yr reinforcing bar mill in northeast Arkansas in the summer of 2025. Hybar, along with Big River Steel and three Nucor mills already in the region, could further bolster the lower Mississippi River basin as a major scrap market. "I'm looking forward to next year because of the increased competition," a Midwestern scrap dealer said. "It's always good to have options." The new consumption could position northeast Arkansas and Tennessee as perhaps the top scrap consuming region, making it an industry barometer in 2025. Chicago has historically held that position and has been the benchmark region in contracts. Shifting flows in Canada Algoma Steel plans to begin ramping up two new EAFs in Sault Ste Marie, Ontario, in March next year to continue making hot-rolled coil and steel plate. The EAFs could eventually bring that facility's maximum steel production levels to 3.7mn st/yr once they fully replace Algoma's blast furnaces. The steelmaker will likely focus on low-copper shred and prime scrap grades to keep up the iron content in its melt mix as it transitions to EAF steelmaking, one Canadian scrap consumer said. Algoma may also continue to rely on raw inputs like direct reduced iron and hot briquetted iron as it ramps up its scrap buying to feed the EAFs. Market participants in Canada expect the mill to buy scrap from the prairies west of Sault Ste Marie, as well as from the greater Toronto area to the mill's east, though Algoma will face competition to pull scrap from the latter region. Scrap dealers in the upper Midwest are also keen to supply Algoma Steel because buyers in that region are scarce. A Midwest dealer noted that Algoma may ship in scrap from US ports on the Great Lakes. Algoma did not respond to requests for comment on its raw material plans. In 2021, the company set up a joint venture with Triple M Metal, a Canadian scrap dealer with 45 yards, that will likely supply scrap for Algoma Steel in Sault Ste Marie. By James Marshall and Brad MacAulay US steel mill capacity additions Million short tons/yr Company Location Product type Capacity added Start date US Steel/Big River Steel Osceola, AR Sheet 3.00 RAMPING ArcelorMittal/Nippon Steel Calvert, AL Sheet 1.65 2H 2024 Algoma Steel Sault Ste. Marie, ON Sheet 3.70 1Q 2025 Nucor Lexington, NC Bar 0.43 1Q 2025 Hybar Osceola, AR Bar 0.63 2Q 2025 CMC Berkeley, WV Bar 0.50 4Q 2025 Total 9.91 Argus reporting & public statements Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: FeV demand may grow next year

24/12/24

Viewpoint: FeV demand may grow next year

London, 24 December (Argus) — Ferro-vanadium (FeV) demand, which is closely tied to the carbon steel sector, has the potential to grow next year after a sluggish 2024, but economic and geopolitical uncertainties make conditions difficult to forecast. The outlook suggests FeV consumption will increase, driven by global steel production growth, particularly in countries such as India, as well as a potential rebound in key markets such as the US and Europe. The World Steel Association (Worldsteel) sees 2025 demand rising by 1.2pc to 1.772bn t, after a slight contraction this year. Most of the major economies, including China, are likely to record lower steel demand this year, although India bucks the trend, with robust demand growth expected throughout 2025. In developed economies, steel demand could grow by 1.9pc next year, driven by a recovery in the EU and, to a lesser extent, in the US and Japan. Buyers in Europe have been wary about purchasing large volumes of FeV in recent weeks, with fewer volumes expected in next year's long-term contracts as steel plants are looking for more flexibility and are "afraid of buying material that in the end they might not need", a trading firm said. Construction The construction sector remains a crucial driver of FeV consumption, primarily because of its dependence on steel for infrastructure projects. But the construction industry's challenges, particularly residential construction in developed economies, have dampened overall steel demand. High borrowing costs have stifled housing activity, with interest rate hikes slowing building projects. "A meaningful recovery in residential construction (in the EU, US and South Korea) is expected to begin from 2025 onwards with the expected easing of financing conditions," Worldsteel said. Rebar production also has faced challenges, with Chinese steel mills reducing output on lower demand from the real-estate sector up to September, when new rebar standards were introduced by China's government. The new standards were intended to encourage higher vanadium content in steel, but the anticipated FeV demand boost has not yet materialised because overall appetite for the alloy remains suppressed by ongoing struggles in China's real-estate sector. China's rebar output fell by 1.9pc on the year to 17.7mn t in October , with January-October output showing a 14pc drop from the same period a year earlier, according to data from the National Bureau of Statistics. Without any lift from China, European FeV prices remain driven primarily by weakness in the continent's own construction sector, which continues to limit steel rebar trading volumes. Argus' weekly Italian domestic rebar assessment was at €550/t ex-works on 11 December, marking an 11pc drop from the start of this year. Automotive The automotive sector, particularly the electric vehicles (EV) market, will be a key driver of FeV demand next year. High-strength low-alloy (HSLA) steel — a type of carbon steel known for its superior strength-to-weight ratio — is crucial for light vehicles and EVs. While light vehicles and EV manufacturing has slowed this year, with factory closures and inventory reductions by major carmakers such as Volkswagen and Stellantis , the industry is expected to recover next year as the push towards sustainability continues. The green transition, which includes renewable energy projects and electric grid expansions, will further contribute to the demand for HSLA steel and, by extension, FeV. But EV growth is likely to slow in the short term under the administration of US president-elect Donald Trump, who could prioritise traditional energy sectors, potentially limiting support for renewables, industry participants said. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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