No Current Demand for Iron 6-29-12

[Bear]

With all the threads lately about the falling price of steel, I just found a news story of particular interest to us all. PBS TV broadcasts a NHK World news here on weekdays. It is a Tokyo based news, and a friend in Japan has told me NHK is one of their most trusted news sources there. I couldn't find the story on their website, maybe it just hasn't posted there yet.

Todays news has a story on the slow demand for iron ore, and shows mountains of ore (tens of millions of tons) being stockpiled at the docks, waiting for manufacturers orders to arrive, which will only happen when the economy begins to improve, and they begin once again to sell their products, which could very possibly be awhile.

[Bear]

from a reuters article @ Iron Ore-Spot prices fall, mill appetites weak | Reuters

Fri Jun 29, 2012 4:00am EDT

* Weak industrial profits underline slower growth
* Steel prices down 6 pct in April-June
* Australian, Brazlian cargo prices fall by $1/T

(Updates rebar price)
By Ruby Lian and Fayen Wong
SHANGHAI, June 29 (Reuters) - Spot prices for iron ore
cargoes to China fell on Friday as buying interest from steel
mills remained tepid, with data showing a fall in industrial
profits for a second straight month underlining slower domestic
growth.
Steel demand in China, the world's largest producer and
consumer, has been waning since early April as Europe's debt
crisis and a property tightening campaign have slowed economic
growth, dragging down steel prices by 6 percent over April to
June.
China is expected to grow at the slowest pace in more than
three years this quarter and industrial profits fell for a
second straight month in May on slackening domestic and external
demand.
"Traders sealed deals (to buy iron ore) but have found it
difficult to sell on market as mills are not buying," said a
Shenzhen-based iron ore trader.
Prices for Australian and Brazilian cargoes to China fell by
$1 per tonne on Friday, according to Beijing-based industry
consultancy Umetal.
Benchmark iron ore with 62 percent iron content
.IO62-CNI=SI dropped half a dollar to $134.90 per tonne on
Thursday, the lowest since June 14, data from the Steel Index
showed. It fell more than 8 percent over the April-June period.
Still, there are hopes Beijing will do more to boost the
world's second-largest economy, which could lift steel and iron
ore demand later in the year.
"Some traders are quite positive on the steel market in the
second half of this year, and the market should not be as bad as
the first half," the trader added.
However, any gains in iron ore and steel prices could be
curbed by a supply glut in China, which has about 900 million
tonnes of annual steel capacity but may only be able to absorb
700 million tonnes this year.
Steel output in China has jumped to more than 2 million
tonnes on a daily basis since April, but has started to fall
since late May. Daily steel output was estimated at 1.971
million tonnes from June 11 to 20, down 1.4 percent from the
preceding 10 days, industry data showed.

[Bear]

it was really mind boggling to see the endless rows of mountain after mountain of iron ore just sitting there waiting/wishing for a buyer

[Amnelson]

A picture of the ore docks in Duluth Minnesota. The picture is somewhat old (few months) but it gives a sense of scale. I believe that the docks fit 2 ore haulers, they are the biggest things in the port by far. The next closest is the coal docks on the other side of the port.

I unfortunately don't have a picture of the ore (tactonite ~50% iron). I'll try to grab one when drive by on Monday or there abouts. It may not be as full as other areas due to the flooding up here knocking out some rail lines.

*correction

The ore docks on the Wisconsin side are of a similar size.

[Bear]

I guess we're shippin it all to china, and they're stockpiling it over there?

[Amnelson]

Could be the case, I haven't read the shipping logs in quite a while.

[PistoneScrapProcessing]

The iron ore is being sold trust me. Look up the richest person in the world. She is a women who owns iron ore and other metal mines. She didn't get rich from sitting on material. Please keep in mind to that america is changing. We only have I believe at last count 19 or 20 blast furnaces still running in the USA. We have switched from producing raw steel via a blast furnace to being a mini mill producer over the last 30 to 40 years. Thanks in part to NUCOR and other smaller mini mill operations. Scrap is a cheaper alternative then always having to source from various parts of the world the raw material needed to produce raw iron.

[Nealcrenshaw]

With gas prices so goes the price of steel.

[Bear]

Today there was an almost identical news story with but one exception, today's story was about coal. So now China has so much Iron and Coal stockpiled over there they are hard pressed finding places to store it