CZR "FOMO", page-83

This morning from a leading publication:-

Rising low grade productionIt’s not only FMG benefitting from narrower discounts for low grade iron ore.It has opened a window for smaller players targeting that end of the market like CZR Resources (ASX:CZR), which ended the year in a trading halt pending what looked like a potential deal with fellow Pilbara iron ore junior Strike Resources (ASX:SRK).Rio Tinto (ASX:RIO) has also stated it expects to produce elevated volumes of its lower grade SP10 fines and lump products until it can develop the higher grade Rhodes Ridge mine later this decade.Meanwhile Mineral Resources (ASX:MIN) is planning to bring online the long delayed Onslow Iron project later this year, a holdover from the latter stages of the late 2000s and early 2010s iron ore boom.CRU Group analysts say rising supply of lower grade iron ore products could impact prices in 2024 despite low mill margins continuing to incentivise low grade iron ore purchasing.“While demand for low-grade ore will remain steady, supply is expected to increase. Rio Tinto’s quality struggles will persist and Mineral Resources’ Red Hill project will add new low-grade volumes from the Pilbara,” analysts led by Liz Gao wrote last month.“In our view, low-grade supply will rise more than demand and result in low-grade discounts rising from the current low levels of 6%.“During 2018–2022, the 58% Fe fines price was on average 14% below the 62% Fe price. In other words, the low-grade market will not be as strong as it is in 2023 Q4, and we see a high chance that discounts could be rising in 2024 H2.”They say low inventories in China remain an upside risk, especially if there are unexpected supply shocks.At this point however, the big four producers in Rio Tinto, BHP (ASX:BHP), Fortescue (ASX:FMG) and Vale are all expecting to grow production, pending the impact of the wet season in Brazil and the Pilbara.