Ann: Chairman's letter - Scheme of Arrangement, page-115

latest IO prices from Umetal



foreign prices in USD, portside prices in Yuan


change in the premium between indicated IO products. One year period

Example of different prices for different quality products. 20April 2018. The prices are per wmt and include 17% VAT

• ·04-20 日照港　　　Pb粉 　 61.50%　645元/吨
• ·04-20 京唐港　　　Pb粉 　 61.90%　470元/吨
• ·04-20 曹妃甸　　　混合粉 　 58.00%　315元/吨
• ·04-20 曹妃甸　　　金步巴 　 62.50%　405元/吨
• ·04-20 天津港　　　混合粉 　 58.50%　325元/吨

As you can see there is lot of information to digest to trade options with any chance  of  success.
Link to Platts to get daily 62%Fe benchmark price. Free access to some articles.
https://www.platts.com/commodity/metals/raw-materials-iron-ore-scrap-metal-prices


STEEL OUTPUT


China's steel output in Q1 rose to just over 212 million mt, up 4.5% on the year-earlier quarter, albeit against a period where steel production was under-reported last year owing to contributions from induction furnaces yet to close by the end of 2017.

The increase in crude steel output nonetheless was surprising.

"The production restrictions imposed during the winter months came to an end in mid-March -- that said, not all manufacturers had complied with the cuts, and production had already been expanded again beforehand," Commerzbank said in a note Tuesday.

March's crude steel output was equivalent to 2.386 million mt/day, up 2.9% from the daily average of January-February. However, China's pig iron output fell 1.1% on year to 60.64 million mt in March, according to National Bureau of Statistics data.


Traders and investors are focused on China's EAF steel making growth, and greater scrap consumption at blast furnace complexes as potentially growing substitutes for iron ore.

"Scrap supply is rising due to increased recycling and the closure of illegal induction furnaces, but scrap supply and demand remains tight given elevated blast furnace consumption," Jefferies analysts led by Seth Rosenfeld said in a note this week. The US investment bank sees a mixed picture for EAF growth in China, mainly on gas and power costs.

FMG negotiated for reduction of some discounts for its FB and  SSF products, starting in May, a good news for FMG shareholders.

Read the article below about EAF. Indonesian scrap expert may learn something. I included this article to warn people what the future holds for low quality IO miners.

China steel capacity replacements continue in 2018 with more electric arc furnaces


Singapore (Platts)--12 Apr 2018 737 am EDT/1137 GMT


China granted approvals for the installation of new steelmaking facilities with a capacity of 149.8 million mt a year between the start of 2017 and April 2018, predicated on the closure of 169.7 million mt/year as part of its capacity replacement campaign, S&P Global Platts calculations based on Chinese local government announcements show.

The new capacity, most of which has no fixed timetable, will come on stream mainly over 2018-20. Most of the closures will be carried out once new facilities are commissioned.

Of the total new capacity, 51.4 million mt/year, or 34%, will use electric arc furnaces, while the rest will be converters.

Some 11 million mt/year of this new EAF capacity Will replace converters, while the rest will be the replacement of existing EAFs.

China has been encouraging steel mills to switch from blast furnaces and converters to EAFs since 2017. This is because EAFs are more environmentally friendly, and the supply of ferrous scrap has grown after the elimination of 140 million mt/year of induction furnace capacity in 2017.

Some market sources said the switch from blast furnaces and converters to EAFs would be slow as scrap supply has been unstable and inadequate.

However, some said the trend would be irreversible because as China's fight against air pollution continues the frequent and stringent output controls at blast furnaces would encourage steelmakers to shift gradually to EAFs, which would be spared output cut orders during bad weather.

Meanwhile, from the start of 2017 to April 2018, approvals granted for new pig iron making facilities -- blast furnaces, has totaled a combined capacity of 111.66 million mt/year, also predicated on the shutting down of existing blast furnaces with a pig-iron capacity of 130.3 million mt/year.

Ferrous scrap prices on the way up.

--Staff, [email protected]
--Edited by Jonathan Dart, [email protected] scrap prices, an industry reference for electric-arc-furnace-based complexes and a raw material for integrated steelmaking plants, are also seeing support, with potential for greater demand in the US.

Benchmark Turkey import prices surged in March, after levels remained high since the second half of 2017. March averaged at $372/mt CFR Turkey, which is the highest for the month since September 2014.

--Hector Forster, [email protected]
--Edited by Jonathan Loades-Carter, [email protected]