The total number of drill rigs deployed onshore in the US fell from 1,930 to 1,918 last week. Rigs deployed in oil plays declined from a record high of 1,609 to 1,590, the lowest level in six weeks and the largest fall since 22 August. Rigs deployed in gas plays increased from 320 to 328. The fall in oil rigs reflects operators reducing drilling in response to the fall in crude oil prices.
Base metals finished higher on demand hopes as expectations build that China will provide stimulus to lenders and after US consumer confidence unexpectedly lifted in October. Gold futures fell on weaker safe-haven demand as equity markets rallied. Crude oil benchmarks were mixed, while alumina lifted 0.4% w/w to USD356/t (FOB Australia). Iron ore rose by 0.6% to USD80.62/t (CFR China).
Iranian president, Hassan Rouhani, has told oil minister, Bijan Namdar Zanganeh, to try to prevent any further falls in crude oil prices. Last week, Iran’s deputy oil minister said he was not worried about the fall in oil prices because he believes it will pass.
US iron ore and coal producer, Cliff Natural Resources, said it expects to take an impairment of USD6b for its iron ore and coal assets in 3Q14 due to a downward revision of long-term pricing and adverse conditions in seaborne iron ore and coking coal markets.
China Coal Energy’s saleable coal production fell by 5.4% y/y to 9.26Mt in September. From January to September, the company’s saleable coal output lifted 0.6% y/y to 89.17Mt.
SINGAPORE, Oct 17 (Reuters) - Spot iron ore prices pulled further away from 3-1/2-week highs as buyers from top importer China stepped back after restocking inventories. "Some mills did replenish some stocks after the National Day holidays, but after that the buying interest has slowed," said an iron ore trader in Shanghai, referring to the Oct. 1-7 holidays. Iron ore for immediate delivery to China .IO62-CNI=SI fell 2.1 percent to $80.50 a tonne on Thursday, according to data compiled by the Steel Index. Iron ore, the top revenue earner at global miners Rio Tinto and Vale, jumped 4 percent to $83.10 on Monday, the highest since Sept. 17, in a rally spurred by a recovery in Chinese steel futures. The price fall since then puts the commodity back near a five-year low of $77.50 reached just before China's National Day break. Shanghai rebar futures were nearly flat at 2,640 yuan ($431) a tonne by midday after touching a three-week top of 2,683 yuan on Thursday. Some iron ore traders who have held off on offering cargoes to the market earlier this week on hopes of keeping prices high have resumed sales, the Shanghai-based trader said. "They can't hold off offers for too long because they need to clear some of their stocks," he said. Iron ore prices have fallen 40 percent this year as big, low-cost suppliers boosted output at a time of slower demand growth from top buyer China. Australian miner Fortescue Metals Group said on Thursday that shipments for the September quarter rose 60 percent from a year ago to 41.5 million tonnes. Fortescue has expanded rapidly to become Australia's third-largest iron ore miner, behind Rio Tinto and BHP Billiton , and is currently producing at a rate of 156 million tonnes a year.
Peabody, the world’s largest private coal producer, sold 57Mt of coal in the September quarter, down 9.6% relative to last year. From January to September, the company managed to reduce its unit coal costs marginally in the US relative to last year, and has pushed Australian unit coal costs down 4% y/y to USD78/t. Peabody highlighted seaborne coal markets remain challenged, with concerns rising on Chinese coal imports. On the positive side, the company pointed at strong coal import demand growth in India and said that more than ~18Mt of the 27Mt of announced coking coal production cutbacks have yet to take place.
Base metals finished mostly lower on demand concerns as markets are expecting that China’s economy expanded at its slowest pace in the September quarter since 2009. Brent crude oil fell on views OPEC crude oil supply will continue unabated until the group meets on 27 November, exacerbating current surplus concerns. Gold futures rose on views the US Fed will delay lifting interest rates due to the impact of a faltering global economy on the US. Iron ore rose by 1.0% to USD81.60/t (CFR China).
Aurubis, the world’s second-largest producer of refined metal, said copper demand has slowed in Europe and the US as buyers are in a “wait and see mode”. The company pointed at tensions in Ukraine and Russia and better optimisation of copper stockpiles as reasons for the slowdown in demand.
According to Korea South-East Power (KOSEP), South Korea’s coal consumption is expected to increase ~50% from 80Mt in 2013 to 120Mt in 2023. The company estimates coal power capacity will lift ~90% from 23.41GW in 2013 to 45GW in 2023.
According to the Japan Iron & Steel Federation, Japan’s crude steel output fell 0.5% y/y to 9.24Mt in September.
Base metals and crude oil benchmarks finished mostly higher on demand hopes after China’s GDP growth in the September quarter and industrial output growth in September beat forecasts. Prices also rose after US existing home sales in September rose to their highest annual rate this year. Gold futures advanced on views that the US Federal Reserve will lift interest rates later than markets expect. Gold also rose on stronger physical demand after Switzerland’s gold exports rose to a seven-month high in September. Iron ore rose by 0.3% to USD81.83/t (CFR China).
Freeport McMoRan, one of the world’s largest copper ore producers, forecasts that world copper ore markets will remain balanced from 2014 to 2015 but highlighted a potential deficit forming in 2015 in the event of unexpected disruptions to production.
Chilean iron ore miner, CAP Mineria, is now aiming to produce 18Mtpa of iron ore in 2017, two years later than previously forecast, reflecting a response to current iron ore market conditions. Earlier this month, the company cut its 2014 iron ore output forecast from 14Mt to 13Mt.
According to China’s National Bureau of Statistics (NBS), China’s crude steel output lifted 3.2% y/y to 67.5Mt in September. Relative to August, daily crude steel production rates rose by 1.3% to 2.25Mt/day. From January to September, China’s crude steel output has lifted 2.3% y/y to 618Mt.
Anglo-African Minerals is planning to fast track its 2Mtpa Forward Africa Resource (FAR) bauxite project in Guinea. The company hopes to begin production at FAR by 2016, conditional on scoping and bankable feasibility studies.
Instead of trying to bash guest posters maybe you could direct some of that energy at the question about market share of the minor IO players?
Less energy would be required to sign up and become relevant.
Feel free to join the debate in full.
I have in the past made my position clear that smaller high cost players are important to the state as they are in effect more labour intensive. This is mainly due to the lack of infrastructure which drives up their transportation costs.
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