How Are Iron Ore Miners Placed in the Current Commodity Rout?
Iron ore prices above $45 per ton should motivate even major iron ore miners to accelerate their brownfield expansions so as to fully optimize their infrastructure.
The market is factoring in very low iron ore prices following the supply and demand mismatch scenario that began in mid-2014.
The decision for using scrap versus iron ore to produce steel depends upon the relative prices. The steel used by Chinese consumers in the boom period might come back to the market in the form of scrap.
As there is still more low-cost supply ready to come online, the biggest such project being Vale’s low-cost S11D, there is a risk of some big iron ore miner becoming a marginal producer going forward.
Depending on the iron ore grade, moisture content, impurities, and product mix, the prices realized by iron ore miners vary widely.
Australia’s billionaire Gina Rinehart’s $10 billion Roy Hill iron ore project expects to start shipping iron ore to world markets starting in October 2015.
When Vale’s S11D project comes online, it could be a further game changer in the iron ore market. Its cash costs per ton are pegged at close to $11 per ton.
China’s iron ore is of lower quality, containing iron ore content of ~20%–30%, compared with more than 57% for the global iron ore majors.
Chinese demand is key for iron ore China consumes about 70% of the globally traded seaborne iron ore. In 2014, seaborne iron ore trade was close to 1.3 billion tons.…
Iron ore prices fell 49% in 2014, which was reflected in the share price performance of major miners. In this series, we’ll discuss the position of various iron ore players on the cost curve relative to iron ore prices.
The peers outperformed Alcoa based on the net profit margin, EPS, and PBV ratio. However, Alcoa is way ahead of its peers based on the current ratio.
Alcoa (AA) has a market cap of $14.42 billion. Its YTD (year-to-date) price movement is falling day by day. Alcoa’s income has fallen every quarter.
Announcing his 8.5% stake in Freeport-McMoRan, Carl Icahn said that he plans to discuss capital expenditures and more with Freeport management.
On October 7, 2015, spot copper closed at $5,241 in the London Metals Exchange—its highest level since September 21.
On October 7, Freeport-McMoRan closed at $13.01—the highest closing level since July 23. 2015 has been a roller coaster ride for Freeport investors.
Platinum touched its six-year low of $893.40 per ounce on October 2 and then rebounded 4.8% on October 7 to $936.50 per ounce. It was platinum’s fifth straight day of gains.
Monsanto expects to achieve ongoing EPS of $5.10–$5.60 in fiscal 2016. On an as-reported basis, the EPS is expected to be $4.44–$5.01 in fiscal 2016.
For Monsanto’s (MON) Seeds and Genomics segment, the sales in 4Q15 were recorded at $1.3 billion. For fiscal 2015, the segment sales were $10.2 billion.
Monsanto’s (MON) falling performance included net sales of $2.4 billion for 4Q15. The net sales for fiscal 2015 were reported at $15 billion.
On October 7, Monsanto (MON) reported its financial results for 4Q15. The stock rose by ~7% after the earnings release. It had been falling in September.