Replies to post #3540 on The Rising Influence of Rising Affluence

[Democritus_of_Abdera]

Re: Iron Ore Pricing softness... (i.e. the Platts iron ore index has recently slipped about 5%)

Dew, as you have pointed out, the major iron ore producers have consistently and emphatically stated that iron ore demand is strong and will likely remain so over the next 2-4 years. An example being the article you referenced in #msg-67518875:

“Pricing has softened in the past week or so, and that is on the back of softening out of China, but more than anything else there is an undermining of confidence because of what is happening in Europe and the rest of the world," Mr Power told The Australian. The Platts iron ore index has slipped from a record high of $182 a tonne early this year to $172 a tonne this week. "But everybody is telling me there is no change in underlying demand here," Mr Power said. "I have not heard anything at the conference saying that China is slowing or that there is any real cooling of demand."

Never the less, I have become wary based upon the hint that there may be Chinese customer requested slowdowns in iron ore deliveries per the article appended below:

http://www.hellenicshippingnews.com/index.php?option=com_content&view=article&id=49479:australias-iron-ore-miners-deny-experiencing-shipment-delays-&catid=44:latest-news&Itemid=64

Australia's Iron Ore Miners Deny Experiencing Shipment Delays
Thursday, 29 September 2011 00:00

Order books for the biggest iron ore producers in Australia remain full and the companies say they aren't experiencing delays to shipments of the raw steelmaking commodity, although the market remains concerned over demand and support for what had been strongly rising prices.

Rio Tinto PLC (RIO) is experiencing no delays to shipments, Alan Davies, president of the Anglo-Australian mining company's international operations, said Wednesday at an industry conference in China.

Perth-based Fortescue Metals Group Ltd. (FMG.AU) likewise has had no delays or deferral requests from its customers, spokeswoman Elizabeth Gosch told Dow Jones Newswires.

BHP Billiton Ltd. (BHP) said demand remains strong for iron ore, coking coal, copper and other metals in China, a major market for the commodities.

Order books for both Rio and BHP, the two largest producers of iron ore in Australia's remote western Pilbara region that ships much of its ore directly to China, remain full. However, traders say there is a great deal of skepticism in the market over where prices for iron ore are headed amid concerns faltering economic growth in the U.S. and Europe could spread to Asia. "There is talk that some customers have asked exporters to hold off loading some ships," Peter Esho, chief market analyst at City Index in Sydney, said.

Rio, BHP and Fortescue are investing billions of dollars to ramp up production capacity in the Pilbara, which accounts for roughly 40% of the world's trade in iron ore by sea.

Rio last week told investors in London and New York commodity prices were still robust, although there was increased volatility and markets are weaker than they were six months ago. BHP executives had a similar message for investors this week during a tour of its operations in Western Australia, saying urbanization and industrialization in China, India and elsewhere would drive long-term commodity demand.

Fortescue's shares ended Wednesday down 7.9% at A$4.52, while BHP rose 0.5% to A$35.52 and Rio's shares advanced 1% to A$64.05.

Source: Dow Jones