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Pressure remains on BHP despite rise in earnings

Global miner BHP, seeking to fend off activist investor Elliott Advisors, handed an extra $800 million (573.07 million pounds)to shareholders but its share price slid on Tuesday after costs rose and interim results fell short of forecasts. All the major miners have recovered strongly as commodity prices have rebounded from the 2015-16 crash. However, inflation is creeping up as commodity price rallies can inspire demands for higher wages and service companies seek increased fees. BHP must also contend with Elliott, which has a stake of around 5 percent in its ...

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The world’s fourth largest iron ore producer wants to drive production costs even lower

After its production costs hit a record low in the last quarter, Fortescue Metals wants to drive costs even lower this financial year, according to the CEO of the Australian iron ore producer. Speaking to CNBC on “Street Signs,” Elizabeth Gaines, CEO of Fortescue Metals, talked about the strategies that she believes will help the iron ore company to cut costs. The measures that the company is taking is largely around automation, she said. “We’re rolling out our autonomous haulage system to our Chichester operations. That’s a conversion of over ...

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Soybeans ease from 7-month high, wheat struggles near 2-week low

Chicago soybeans edged lower on Thursday, hovering just below a seven-month high reached on the back of dry weather curbing yields in Argentina, the world’s third largest exporter. Wheat ticked higher, although the market remained near last session’s two-week low as U.S. cargoes struggle to win business in a highly competitive global market. The most-active soybean contract on the Chicago Board Of Trade had eased by 0.2 percent to $10.32-1/2 a bushel by 0346 GMT after climbing 0.8 percent in the last session. Wheat added 0.1 percent to $4.47-3/4 a ...

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Glencore back to profit in iron ore trade for 2017

Commodities group Glencore said Wednesday iron ore trading volume increased marginally in 2017 as it rebounded to profit for the business among a widening in pricing by grade with less low grade demand in China expected. Glencore traded 47.7 million mt of iron ore in 2017, up from 47.1 million mt in 2016, the Swiss trader said in a report. Glencore booked adjusted EBIT of $7 million for iron ore, from a loss of $9 million in 2016 on the same basis. Iron ore reference prices averaged 22% higher at ...

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Vale: 2017 Ramp-Up Propels Iron Ore Output To Record High

Vale ( VALE ) released its production report for the fourth quarter and full-year 2017 towards the end of last week, with record iron ore production levels the standout takeaway from the report. The company reported production of 366.5 mil metric tons of iron ore in 2017, a 5% year-over-year (Y-o-Y) increase in the production of iron ore fines, mainly driven by the ramp-up of production at the company’s S11D mine . However, iron ore sales dipped by 0.7% despite China’s enhanced demand for high-grade iron ore. The below figure ...

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Maximising returns: Chinese mills to ramp up output before curbs bite again

China’s steel producers are eager to unleash their mills’ capacity when this winter’s output curbs end next month, hoping for a repeat of last year’s record profits based on high margins and less competition as outdated plants were closed. China shut down up to half of its steel production this winter in 28 cities in the country’s manufacturing heartland in the north as part of an anti-pollution campaign. With margins still encouraging full output, China’s pent-up steel production should erupt when the curbs expire on March 15. Because of the ...

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European thermal coal traders change strategy as Q2/Q4 contracts flip into contango

The front half of the CIF ARA thermal coal futures curve has shown a move into contango recently as low demand in the spot market has continued to pull the prompt contracts down, affecting trading strategy. The spread between the Q2-18 contract and the Q4-18 contract first flipped from backwardation to contango earlier in the month and was in a contango of 30 cents Monday, having been backwardated $2.40 on the first day of trading in 2018. Sources attributed the drop at the front of the curve to a slow ...

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China’s benchmark power coal price edges down

China’s benchmark power coal price went down slightly during the past week partly due to shrinking demand from coal-fired power plants. The Bohai-Rim Steam-Coal Price Index, a gauge of coal prices in northern China’s major ports published weekly, dropped to 575 yuan (around 90 U.S. dollars) per tonne from 576 yuan a week ago, according to Qinhuangdao Ocean Shipping Coal Trading Market Co. Ltd. The price was also lower than the 587 yuan in the same period last year. Power coal prices had been rising during the past weeks because ...

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Why the commodity rally will get back on track

Are we in the early stages of a sustained rise in commodity prices? And what does it mean for the US dollar? We posed these questions a year ago when robust global economic growth was driving commodity demand and the US dollar was starting to tip over from a 15-year high. The two are inextricably linked, though which is the horse and which the cart is not always clear. The recent disruption in financial markets suggests it’s worth a fresh look at the relationship. Over the past couple of years, ...

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Indonesia: Government to set new coal price formula next week

The Energy and Mineral Resources Ministry plans to introduce a new price formula for domestic coal sales by next week at the latest, despite the ongoing disagreement between state electricity firm PLN and local coal miners. Since earlier this month, the ministry has been in discussion with PLN and local coal miners regarding the new price formula for coal supplied to PLN under the domestic market obligation (DMO). The new formula is needed to help ease PLN’s financial burden amid increasing global coal prices. Coal accounts for more than 57 ...

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Strong South African coal bids boost markets amid tight supply

Colombian coal arbitrage to India opening CIF ARA prices gain $5 over two days South African coal markets continued to be in tight supply Tuesday, helping Atlantic physical prices gain $1 despite quiet activity during the Chinese holiday period. A bid and offer was heard for April-loading at $99/mt, respectively, for FOB Richards Bay 6,000 kcal/kg NAR coal, a day after an April-loading cargo traded at $98/mt. A trading source said trading activity was originating from a single source. “No one else is paying anywhere near this level,” one trade ...

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Australia’s FMG links plan to increase iron ore grade to Eliwana development

Australian iron ore miner Fortescue Metals Group reiterated Wednesday it was pinning its hopes of increasing the grade of the majority of its products to more than 60%-Fe on the development of its Eliwana mine. Newly appointed CEO Elizabeth Gains reiterated the company’s target of increasing its ore grade, which it announced last November, was linked to the replacement of its Solomon Hub Firetail operation. “We are in the final feasibility around Eliwana in the Western Hub as the replacement for Firetail,” Gains, who replaced Nev Power as CEO, said. ...

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Fortescue: Half Year Financial Results to 31 December 2017

Net profit of US$681 million and interim dividend of A$0.11 per share Fortescue has released its FY18 half year results reporting a net profit after tax of US$681 million and Underlying EBITDA of US$1,828 million. HIGHLIGHTS • Safety TRIFR of 3.1, a 3 per cent improvement on the prior comparable period • Net profit after tax of US$681 million and Underlying EBITDA of US$1.8 billion • 84.5 million tonnes (mt) of ore shipped • US$12.11 per wet metric tonne (wmt) C1 cost, a 7 per cent improvement compared to HY17 ...

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Guptas’ Optimum Coal Risks Suspension as Workers Protest

South Africa’s Optimum Coal mine, linked to the politically connected Gupta family, will be suspended if managers fail to comply with the site’s social and labor plan. Workers protested Wednesday over the uncertainty at the operations. The Department of Mineral Resources conducted an inspection on Feb. 8 and Optimum Coal must take measures to reach compliance within 60 days of a pending order, the ministry said by email. The National Union of Mineworkers said it went on strike because key questions have yet to be answered at the mine. “What ...

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Wesfarmers continuing review of its remaining coal asset

Australian conglomerate Wesfarmers said on Wednesday that the sale of its Curragh coal mine, in Queensland, would be completed in the second half of the year and confirmed that it was continuing the strategic review of its remaining coal asset, a 40% interest in the Bengalla mine, in New South Wales’ Hunter Valley. The company, which has businesses such as hardware chains Bunnings, Coles supermarkets and department stores Kmart, Target and Officeworks in its fold, in December announced the sale of its largest coal asset for $700-million. MD Rob Scott ...

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