Replies to post #385022 on Zeev's Turnips Patch-No Politics (ZEEV)

[Fred Langford]

Not a Jr. but I like CVRD (NYSE RIO), a Brazilian company.
Here is latest news release:

World iron ore mkt seen firm through 2006-CVRD
By Peter Blackburn

MARIANA, Brazil, April 20 (Reuters) - RIO (NYSE) The world iron ore market will remain firm in 2005 and 2006 because of strong demand, the president of Brazil's CVRD said on Wednesday.

"We dont see any sign of a decrease in demand for Brazilian iron ore this year or next," Roger Agnelli told reporters after opening a new iron ore mine in Minas Gerais state, southeastern Brazil.

Some analysts said that a 71.5 percent increase it won from steelmakers this year would dampen demand.

CVRD invested 380 million reais ($147 million) on the Fabrica Nova mine in the district of Mariana, part of Brazil's so-called iron triangle, which will produce 10 million tonnes of iron ore in 2005 and 15 million t/yr from 2006.

"We are bringing forward projects, such as Mariana, to meet strong Chinese demand," said Agnelli, who runs the world's biggest iron ore miner, Companhia Vale do Rio Doce (CVRD) <VALE5.SA><RIO.N>.

Agnelli added that CVRD had extra orders from steelmakers for one billion tonnes of iron ore which it couldn't meet.

The market is extremely tight. Spot prices are very high," he said, adding that stocks of other metals such as copper, nickel and aluminum were also low.

In addition to Fabrica Nova, CVRD has four other iron ore projects in Minas Gerais state which will raise its total output by 61 million tonnes by 2007 when its overall output should reach 300 million tonnes, Agnelli said.

CVRD produced a record 218 million tonnes of iron ore in 2004, of which nearly half was mined in Minas Gerais state.

Another mine, Fazendao, in Catas Altas, is due to start producing iron ore in 2006. Production capacity will also be increased at the Itabira, Brucutu and Fabrica mines next year.

Masayuki Hammyo, chairman of Japanese steelmaker JFE Steel, which has a 20 percent stake in the Fabrica Nova mine, said that it was essential to keep the world steel industry supplied with iron ore...


Fred

[basserdan]

Do you have a list of major and minor players that mine iron ore? Other than the play I have with gpxm I am bare of iron ore miners, especially the juniors.
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Hi opnion,
Sorry for the delay in getting back to you, but iron ore miners aren't really my bag.

Fwiw, I own relatively small positions in two of the biggies, BHP Billiton Ltd (BHP) and Companhia Vale do Rio Doce (RIO), both of which are down about 20% from their highs.

If you're a member of SI, I suggest you PM Stephen O, a real student of base metal stocks.

His profile:

http://www.siliconinvestor.com/profile.aspx?userid=4339536

[phill]

opie, fwiw, CLF is US major iron ore producer, internationally active
investor fact sheet: http://www.b2i.us/Profiles/Investor/Investor.asp?BzID=1041&from=du&ID=10028&myID=2569&am...

regards,

phill

[basserdan]

Hi opnion,
Of interest?

The Daily Resource

By Dave Forest
April 28, 2005

Although it may not be sexy, the steel industry has a lot riding on it for commodities investors. Such buyers were likely relieved yesterday to hear from analysts MEPS International that global steel production will increase by a healthy 5 percent this year, to 1,100 million tonnes.

The increase – which is well below the 9 percent gain seen in 2004 – will come mainly from China, with that country accounting for 90 percent of growth. At the same time, former USSR nations are expected to contribute less than last year.

Wall Street for one believes the steel sector is a good place to be, according to Morgan Joseph & Co managing director Andrew J. Silver, who spoke at the Dow Jones & Co Steel Finance 2005 conference in Cleveland Tuesday. Silver noted, “We think the good times will last” for the industry, saying, according to Platts, that institutional investors are once again eyeing steel after several years of shying away.

Silver did offer a few reservations on the steel industry, most notably the possibility that rapidly increasing production in China will not be absorbed domestically and will result in a glut of exports. China is expected to produce 370 million tonnes of steel per year by 2007.

But according to China’s People’s Daily, Chinese steel output is already starting to leak into the export market. The news service reported yesterday that exports in the first quarter of 2005 grew 319 percent year-on-year to 8.38 million tons. At the same time, it was reported that imports dropped 46 percent or 6.74 million tons.

The same article noted that China may also be curbing its steel industry through macro-economic controls. Steel production was reportedly the only one of the nation’s main industrial sectors that saw fixed asset investment decline in the first quarter of this year, dropping 1.4 percent to US$4.01 billion. "The tumble was the positive result of the nation's macro economic control policies and will help curb blind expansion of low-level production capacity in the sector," Chinese steel association vice-president Luo Bingsheng said.

One final note on steel: analysts CFSB are reporting that April may mark the first month in over three years that steel slab prices decline. The slide would follow similar decreases already seen in Europe and the US.

Such a decline would be in line with the general trend for many of the other industrial metals as of late. Copper fell for the sixth successive session in London overnight, and is currently trading at $1.5098/lb. According to Hong Kong’s The Standard, Chinese buyers are steering clear of the metal, speculating that China will revalue the yuan some time around next week’s Labor Day holiday, making commodities cheaper for Chinese users. The paper also noted that the high prices seen in the copper market during the first quarter of this year may have reduced demand, with Chinese imports falling 15.4 percent year-on-year during the period.

In other base metals news, the International Lead and Zinc Study Group said yesterday that the western world zinc market will be in deficit to the tune of 200,000 tons in 2005. The Group forecast a 2.4 percent rise in global consumption to 10.69 million tons, along with a 5.2 percent increase in mine output to 10.15 million tons. Chinese zinc imports are expected to jump above 100,000 tons. The news did little to help the zinc price, however, which spiked briefly to $0.58/lb but then fell back to a current $0.5747/lb.

Also falling yesterday was oil, which dropped $2.59 in New York to close at $51.61. The loss came after the US Energy Department reported that oil inventories rose 5.5 million barrels during the week ended April 22. The price decline was the largest daily drop for oil this year. Currently, crude is trading at $51.26.

The decline in the oil price helped boost the dollar, which initially fell yesterday when a Commerce Department report showed that US factory orders for durable goods fell 2.8 percent in March. Currency investors are now looking to data due out today on US first-quarter GDP growth. The buck gained late yesterday on speculation that the numbers will be heated enough to spur the Federal Reserve into increasing the pace of interest rate hikes. Currently, the greenback is trading at $1.2931 under the euro. (Up-to-date currency prices)

It appears, however, that the dollar may be coming under increased selling pressure from international financiers. According to The Daily Pfennig, Russia’s central bank yesterday announced that it will increase its euro holdings to 30 percent of total currency reserves. Previously this year the bank had said that euros would make up only 10 percent of its holdings.

Gold and silver both fell on the dollar rally, with the yellow metal shedding $4 to below $432/oz before flattening out to a current $432.10. Silver dropped $0.15 early in New York and then headed sideways for the rest of the day, currently sitting at $7.13/oz.

Finally, it looks as if the world may lose 12 of its nuclear reactors, if the EU gets their way. According to Platts, the Union has told Russia that it must shut down a dozen reactors deemed unsafe, in order for the nation to qualify for increased energy export quotas to Europe. Speaking of the terms, an EU official told the news service, “The Russian authorities are not being tremendously helpful on this point.”

That’s what’s happening… until tomorrow!

http://www.caseyresearch.com/displayArticle.php?id=86