Seaborne Iron Ore Supply Likely to Remain Stable in CY’18 – Rio Tinto

World’s leading iron ore miner – Rio Tinto reported that additions in seaborne iron ore supply in CY18 is expected to be stable against the previous year. In its recently presented report, seaborne Iron ore supply side got strengthened by additional 42 MnT in CY’17 against CY’16. However in CY18 considering supply disruptions, a net change in seaborne iron ore supply is expected to be around 2 MnT.

In the reports Rio Tinto predicts 39 MnT iron ore supply to be added to that in the previous year. The company expects supply side will increase with the considerable increase from Vale Rio Tinto and BHP Billiton.

Major miners adding iron ore supplies-:

— Vale iron ore and pellet production guidance for 2018 remains unchanged at around 390 MnT and 55 MnT respectively. Vales iron ore production achieved a record increase of 5.1% to 366.5 MnT in CY’17 against 348.8 MnT in CY’16 due to the S11D ramp up. Due to the ramp-up of S11D, plus better operational performance in the mine give an edge to produce more in the year CY’18, at Carajás Brazil.

— Rio Tinto’s Pilbara shipments are expected to be between 330 to 340 MnT in 2018, in line with laid guidance. This is subject to market conditions and any weather constraints. In CY’17, the company recorded iron ore shipments of 330.1 MnT.

Expected disruptions in seaborne iron ore supplies-:

Rio Tinto expects 20 MnT seaborne iron ore supply to get disrupted in CY18. It will be mostly disrupted from Minas Rio followed by India and IOC (Iron ore Company of Canada).

— Imposed mining ban operations in Goa (India) -: The declining exports from Goa mines owing to the shutdown of mining operations at 88 mining lease posts 15th Mar’18 resulted in fall in export volumes. Goa has been a considerable source of low-grade iron ore exports to China. India exported 10.95MnT iron ore from Goa’s Mormugao port in CY17.

— IOC Decline in Iron ore Pellet Guidance for 2018-: Iron ore Company of Canada (IOC) has reported a drop of 13% Q-o-Q in its pellet & concentrate production in Q1 2018. At IOC, the revised guidance for 2018 production is 10.3-11.3 MnT of iron ore pellets and concentrates (previously 11.5 to 12.5 MnT).

Another 17 MnT of Iron ore is getting closed CY’18. Therefore the reports suggested in the CY’18 additional supply will be higher by only 2 MnT over CY’17.