FMG (ASX) Iron ore price

Originally posted by scrabble1 ↑

Just after train line reopened after being closed for 2 months, there’s just been another derailment. (Initial derailment story above)

Kiruna is the biggest IO mine in the EU and largest underground IO mine in the world. They produce about 27-28mtpa of IO

https://thebarentsobserver.com/en/i...le-iron-ore-derailway-shortly-after-reopening

The empty ore-wagons derailed about six kilometers north of the former derailment area in Vassijaure, not far from Sweden's border with Norway. Photo: Swedish Transport Administration
More trouble on Kiruna-Narvik (de)railway shortly after reopening
An iron-ore train Saturday evening derailed and again caused a halt in traffic on Europe’s northernmost cross-border line. The incident happened only four days after the railway reopened after being closed for two months after the last derailing accident. Police is investigating possible sabotage.
By
Thomas Nilsen
SVT.

“The investigation will take time given the conditions that exist with extensive damage over a large geographical area in difficult-to-access terrain,” the police says.

“It is currently impossible to forecast when traffic can resume on the route,” says Simon Sunna, head of the railway section with the Swedish Transport Administration.

Sunna admits “It feels very sad that this is happening so near-time to the latest derailment.”

The incident happened just six kilometres north of Vassijaure where an iron-ore train derailed in December.

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The Swedish Transport Administration and BDX Rail have replaced 25,000 sleepers, and repaired broken rails and switches.

The first loaded train went from Kiruna towards Narvik on February 20. Then, iron-ore had been piling up in Kiruna since the week before Christmas.

Logistic manager Linda Bjurholt with LKAB at the time said revenue losses for the mining company were about SEK 100 million [€8,8 million] a day.

Normally, LKAB sends ten full-loaded trains a day to the port in Narvik for shipments to the European market. That counts for about two-thirds of LKAB’s deliveries. The southern rail, to the port of Luleå, continues with four to five trains each day, but there is no capacity to compensate for what is shipped via Narvik, the mining company informed.

The state-owned LKAB mining company supplies at least 80% of Europe’s iron ore which is transported from Svappavaara and Kiruna to the ports of Luleå and Narvik by train. Photo: Thomas Nilsen

LKAB’s Linda Bjurholt calls for double tracks on the line.

“…. we are now seeing the consequences of the limited capacity Malmbanan has, which we have been talking about for so long. If there had been double tracks, we would have been able to increase traffic south towards Luleå harbor, and the consequences would not have been so long-lasting. Now we have had to put products in stock that will be very difficult to deliver to the customers within a reasonable time,” she says.

LKAB port facilities in Narvik. Photo: Thomas Nilsen

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https://gmk.center/en/news/global-iron-ore-trade-grew-by-5-y-y-in-2023/amp/

it should be noted that Sweden is not insignificant either. It actually was the 6th largest exporter of IO in the world in 2023, up 44% to 34mt. Vale has already said in its financials release last week that it will be increasing its shipments to India and Europe this year.

Sweden generally caters for the EU market so there may be need to be IO reallocated to the EU given infrastructure damage in Sweden.

Likewise South Africa’s issues are well known with poor supply chain connectivity between the rail and port. Kumba laid off 450 staff last week in restructuring its ops to only produce 35-37mtpa over the next couple of years. SA are ranked 5th

India as noted this morning (ranked 4th) may be exporting much less than the 44mt over the last year as they look to withhold more IO to meet the needs of steel mills and increasing domestic consumption. Their steel prod growth was 12% last year to 140mt.

so there are likely to be concerns with sourcing IO from countries ranked 4th, 5th and 6th in 2023

article below

Global iron ore trade grew by 5% y/y in 2023

Global iron ore trade in 2023 increased by 5% compared to 2022 – to 1.59 billion tons. The improvement was facilitated by a slight increase in steel production amid the absence of any clear policy to limit production by the Chinese government. This is evidenced by SteelMint data.

Of the total exports of iron ore in 2023, 855 million tons were exported to Australia, which is 1% less than in the previous year. The country ranks first among exporters with a share of 54% in global iron ore exports. Brazil, the second largest exporter of iron ore, accounted for 24% or 380 million tons of seaborne exports (+10% y/y). South Africa is in third place with 59 million tons (+2% y/y).

Exports of iron ore from India increased by 177% y/y – to 44 million tons. Sweden increased its iron ore exports by 44% y/y – to 34 million tons last year as it is a supplier of high-quality raw materials. Ukraine exported 18 million tons of iron ore, down 26% compared to 2022.

Global iron ore consumption, according to BigMint, amounted to 2.51 billion tons compared to 2.25 billion tons in 2022 (+12% y/y).

The main factors behind the increase in iron ore trade are China’s increased imports and increased exports from India and Brazil.

Last year, China increased its imports of iron ore by almost 7% y/y amid an increase in steel production. In addition, domestic production of raw materials in the country declined, and stocks in ports were declining.

Indian exports reached a 3-year high of 44 million tons. This was facilitated by the government’s decision to abolish 50% export duties on all ore grades and 45% on pellets in November 2022. Brazilian exports also increased as one of the largest mining companies, Vale, increased production by 4.3% y/y.

In 2024, the global ore trade will directly depend on China, as the world’s major mining companies have not adjusted their production plans downward.

As GMK Center reported earlier, global direct reduced iron (DRI) production in 2023 increased by 7.4% compared to 2022 – to 135.51 million tons from 126.16 million tons a year earlier. India accounted for more than 36% of the total DRI production.