SHANGHAI, Oct 15 (SMM)—Fenix Resources Ltd., an iron ore exploration company, said Wednesday that it had signed an agreement with a Chinese steel company to sell half of the production of its Iron Ridge project in Western Australia, with the other half sold to Hancock Prospecting’s Atlas ron. Production of the project will start later this year, and the first batch of cargoes will be delivered in early 2021, the company said.
Iron ore futures have fluctuated vigorously since late September. The most-traded SHFE iron ore contract had risen from 750 yuan/mt to 830 yuan/mt, but fell for three straight days after the National Day holidays to close at 798.5 yuan/mt on Wednesday October 14. Production restrictions at steelmakers and a prospect of iron ore supply rebound prompted investors to add short positions. Supply from Brazil and Australia is expected to rise further in the next few months.
A total of 95 vessels carrying 14.67 million mt of iron ore arrived at major Chinese ports during October 4-10, SMM estimates. This was down 340,000 mt from the previous week, but was up 1.99 million mt from the same period last year. The amount of arrivals in Shandong and Tianjin both increased week on week, but those in Tangshan declined as local production restrictions led to port lockdowns. Shipments that departed Brazilian ports were estimated to decline 850,000 mt from the prior week to 7.48 million mt, up 1.25 million mt on the year, which mainly accounted for the slight decline in iron ore arrivals at Chinese ports. If Vale is to achieve its annual production target of 310-330 million mt, it will have to further increase delivering amount in the near term. Rising iron ore supply will pressure its prices.
