Iron and steel raw materials, such as iron ore, metallurgical coal and iron-containing waste, are the world’s largest commodities in terms of production, consumption and transport. In recent years, steelmakers around the world have reduced production as demand for construction, machinery, cars and other downstream industries has dropped sharply, but I will focus on the impact of the new crown on the upstream industry
In the commodity market, we often see a country or a few countries dominate global supply. For example, OPEC, Russia and the United States dominate global crude supplies. Steel raw materials are no exception. Australia is currently the world’s leading supplier of iron ore and metallurgical coal, which accounted for about 60 percent of global maritime shipments in 2019. As a result, Australia is at the heart of the global steel value chain and the disruption of its supply will have a devastating impact on most steelmakers and their customers worldwide
Fortunately, so far, during the new crown epidemic, Australia’s iron ore and metallurgical coal mining and logistics transportation showed considerable impact resistance. Indeed, Australia has even increased its supply of iron ore to the maritime market. In March 2020, as the world’s largest bulk export port, Australia’s Port Hedland iron ore exports reached a record high.
Shipments of coal terminals at Haipouint and Dalling Poole Bay account for more than half of Australia’s metallurgical coal exports, and coal throughput statistics at the terminals show that Australia’s coal production and logistics chains are also largely unaffected. bhp, Australia’s largest metallurgical coal producer, accounts for more than half of the country’s hard-coking coal supply, and its quarterly production statistics show a similar situation. Australia’s iron ore and coal mining and logistics business has a high level of automation, which partly explains the two industries show strong impact resistance
As the world’s second largest maritime iron ore supplier, Brazil’s main iron ore mining and logistics transport has not been significantly affected by the new crown epidemic. However, brazil’s and even the world’s largest iron ore producer —— vale, brazil, warned that its production could be affected by employee segregation and that the company may need to take emergency measures according to the development of the epidemic in brazil. In addition, the company said it was suspended from its iron ore mining and processing operations due to last year’s dam-break in the Bloomadiano tailings dam, and that the new crown outbreak delayed the company’s authorization process to restart business
Mining is one of the core industries in the United States, the United States government during the closure of the epidemic, still allow the mining industry to continue to operate. The United States is the world’s second-largest supplier of marine metallurgical coal in 2019 and is able to meet most of the country’s domestic iron ore demand. Nevertheless, many iron ore and coal production capacity in the United States have been suspended in view of the downward economic trend —— the New Crown epidemic in the United States and the country’s traditional coal export markets —— Europe, India, Japan, Brazil and South Korea. In some small suppliers of raw materials for steel production, the impact of the new crown epidemic on mining operations is even more severe. South Africa and India’s closure policies, as well as mining bans in some Canadian states, have significantly reduced mine production in these countries. In 2019, these three countries accounted for about 10 per cent of global seaborne iron ore supply, so the disruption of supply in these countries will have a significant impact on the global overall supply market. Nevertheless, some of these countries are easing restrictions and major mining companies have resumed production, provided that production is reduced and field workers are reduced. India is one of the largest importers of metallurgical coal, so the country’s full closure could have a greater impact on the demand side of the maritime coal market. A basic fact for mining companies is that the new crown epidemic has delayed or cancelled exploration operations and investment plans because companies want to hold cash to cover operating expenses during the crisis
Post time: May-07-2020