Iranian iron ore miners experienced a good year in 2017, as they became the sixth largest supplier of the material to China by shipping about 22 million tons to the world\u2019s largest importer of iron ore.<\/p>\n
Top ore exporters to China in 2017 were Australia, Brazil, South Africa, India, Ukraine and Iran respectively, according to Chinese customs statistics shared with Financial Tribune by senior market analyst, Keyvan Jafari Tehrani. Shipments to China make up about 91% of Iranian iron ore exports. Accounting for nearly 70% of world\u2019s seaborne ore trade, China imported 1.07 billion tons of iron ore in 2017, up 8% YOY, SteelMint reported.<\/p>\n
What has spurred iron ore demand is the industrial goliath\u2019s crackdown on pollution. The government is mandating steelmakers to use higher-grade ores to curb pollution, buoying imports from high-content ore producers.<\/p>\n
Iranian miners are skating on thin ice, however. A host of negative factors such as India\u2019s plan to boost shipments, Iran\u2019s high finished prices and the Iranian government\u2019s plan to slap tariffs on iron ore exports threaten the sector\u2019s foothold in China.<\/p>\n
India Pushing for Larger Market Share<\/strong><\/span><\/p>\n India is planning to scrap export tariffs on above 58% content iron ore so that it can have a larger share in the Chinese market.<\/p>\n \u201cThe new tariffs will move further down the line to cover more than 62% content ore shipments,\u201d Jafari told Donya-e-Eqtesad.<\/p>\n A rising force among exporters to China would impact Iran\u2019s standing in the market.<\/p>\n China continues to be the largest destination for Indian\u00a0iron\u00a0ore exports in 2017. It made up 82% or 16.23 million tons of total\u00a0iron\u00a0ore exported from India last year. Other major destinations were Japan with 2.62 million tons and South Korea with 610,000 tons, SteelMint\u2019s data revealed.<\/p>\n Indian\u00a0iron\u00a0ore exports to China increased by 14% YOY in 2017.<\/p>\n Granulated Iron Ore Shipments to Diminish<\/span><\/strong><\/p>\n Iran\u2019s breakeven price for iron ore concentrate shipments to China is $49 per dry ton CFR China for state-owned exporters and $66 for granulated ore by private miners.<\/p>\n The average grade for state-owned firms is 65% and 56-58% for private producers, with annual production standing at 12 million and 4 million tons respectively.<\/p>\n The input, compiled this month using company reports, Platts, HIS and Macquarie Research data, highlights Iran\u2019s fragile position compared with competitors in the case of an overall average ore price drop.<\/p>\n The Australian-British miner Rio Tinto, for instance, has a breakeven price of $26 with an average grade of 62% and 328 million tons of output.\u00a0 The multinational BHP Billiton\u00a0boasts of $31 breakeven price and India\u2019s pellet exporters follow with $33.<\/p>\n \u201c\u2026 This means that if the average iron ore price in 2018 drops below $66, which is highly possible, granulated iron ore exports for the private sector will effectively cease to continue, just like 2014,\u201d Jafari said.<\/p>\n Macquarie Research has forecasted 62% content iron ore to be priced at $50-55 and about $55 CFR China, raising the alarm for Iran.<\/p>\n What this translates to is that Iran will turn into ore concentrate exporter in the next fiscal year (starting March 21) and cut granulated shipments.<\/p>\n If market dynamics are bound to limit granulated ore shipments on their own, what is the point of export tariffs the government is touting?<\/p>\n For years, the government has vowed to stop the exports of what it calls \u201cunprocessed\u201d minerals, granulated iron ore included. It has backtracked on the decision every year, however, following criticism from miners and the private sector.<\/p>\n But the issue seems to be back on the agenda, according to Deputy Industries Minister Jafar Sarqeyni, who recently announced that a 15% export tariff will be set on shipments as of the next fiscal year.<\/p>\n Officials claim the move is meant to sway miners to prioritize supplying domestic consumers, but according to Jafari, \u201cimplementing export tariffs on iron ore \u2026 will be pointless\u201d as Iran\u2019s global presence in the market will diminish next year anyway, and requires no push from the government.<\/p>\n Source: Financialtribune<\/a>, steelguru<\/a><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Iranian iron ore miners experienced a good year in 2017, as they became the sixth largest supplier of the material to China by shipping about 22 million tons to the world\u2019s largest importer of iron ore. Top ore exporters to China in 2017 were Australia, Brazil, South Africa, India, Ukraine and Iran respectively, according to […]<\/p>\n","protected":false},"author":1,"featured_media":1927,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,21],"tags":[],"acf":[],"yoast_head":"\n