Iron ore supply will continue to disappoint - Macquarie
2011-07-08 10:34:44 [Print]
Dow Jones quoted Mr Jim Lennon analyst at Macquarie Securities Group said iron ore supplies are set to disappoint with Chinese production in particular continuing to decline.
Mr Jim Lennon told Terrapinn iron ore conference in London that the main supply problems lie in securing financing, issues building out infrastructure, delays due to environmental permitting particularly in Brazil and Africa and depleting grades especially in Australia.
He said that "Iron ore looks set to remain fundamentally tight towards the end of the decade."
Mr Lenon said "Apparent Chinese iron ore production rebounded in 2010 as prices recovered, but remains well below peaks. Declining grades, rising costs and environmental concerns act as a constraint. Chinese iron ore output is pretty flat at current prices, adding that around 100 million tonnes of output that was produced before prices fell during the downturn remains out of the market.”
Mr Lennon said China government doesn't like the impact of iron mining as a rule due to a lack of proper corporate social and environmental responsibility by Chinese miners.
He said that "The government has now started heavy taxing, and costs are rising."
He noted that this is in part due to rising producer price inflation a stronger Chinese currency against the dollar, rising labor costs and declining grades and output there.
Mr Jim Lennon told Terrapinn iron ore conference in London that the main supply problems lie in securing financing, issues building out infrastructure, delays due to environmental permitting particularly in Brazil and Africa and depleting grades especially in Australia.
He said that "Iron ore looks set to remain fundamentally tight towards the end of the decade."
Mr Lenon said "Apparent Chinese iron ore production rebounded in 2010 as prices recovered, but remains well below peaks. Declining grades, rising costs and environmental concerns act as a constraint. Chinese iron ore output is pretty flat at current prices, adding that around 100 million tonnes of output that was produced before prices fell during the downturn remains out of the market.”
Mr Lennon said China government doesn't like the impact of iron mining as a rule due to a lack of proper corporate social and environmental responsibility by Chinese miners.
He said that "The government has now started heavy taxing, and costs are rising."
He noted that this is in part due to rising producer price inflation a stronger Chinese currency against the dollar, rising labor costs and declining grades and output there.
