[ferro-alloys.com]South African iron ore miner Assmang has declared force majeure on some of its contracted shipments, after the country imposed a 21-day lockdown starting March 26 to contain the coronavirus spread, market sources said Thursday.

The declaration of force majeure was widely expected by market sources following Transnet's decision on March 24 to close all its bulk terminals for mineral and mining commodities, including that at Saldanha Bay from where Assmang and Kumba export iron ore.

Assmang did not immediately reply to queries sent by S&P Global Platts.

Kumba has yet to announce any disruptions to its mining operations and contract obligations. Anglo American, which owns South African iron ore mining company Kumba, said Tuesday that it would review the detailed regulations and issue a further statement in due course.

From surveys with contract customers, Platts learned that impacted shipments were largely restricted to those loading from the start of the lock down to mid-April.

A trader with late-April loading Assmang cargo shipment told Platts that the contracted cargo has yet to be affected from the lockdown, with expectations that mining and port operations will resume after the lockdown with a general limited impact due to the relatively customer base for South African products as compared to Australian or Brazilian iron ore.

Market sources were mixed in their expectations for low alumina iron ore demand, given the current usage of South African fines as a cheaper cost alternative to Brazilian options.

There are end-users who are utilizing small volumes of South African fines in their sinter feed as a cheaper alternative to Brazilian fines, an international trader said. The impact on South African supply might lead to them having to switch back to more expensive Brazilian options, the source added.

A Hebei-based mill source, who replaced some of their Brazilian fines and lump usage with South African products early March, was not concerned about the availability of South African products due to sufficient stockpiles at ports.

However, the source pointed to a rise of Yuan 10/wmt for Assmang fines at Yuan 750/wmt Wednesday at Rizhao port on the back of rising iron ore demand and South African supply concerns.

According to Chinese sources, port stocks of South African fines were close to 850,000 mt at the nine major Northern ports in China, while stockpiles of South African lump stood at 1.3 million mt as of Wednesday.

The reduced supply of Assmang's Khumani lump was expected to have a more pronounced effect on inland end-users who rely on its 'hardness' for transportation.

Khumani lump does not break apart much during the transportation from ports to inland mills as compared to other lump brands, another international trader said. As such, some North Asian and inland Chinese end-users have a preference for it besides its high quality, the source added.

Amid a supply tightness for the mainstream Pilbara Blend lump in Northern China, Khumani lump was also seen as a potential direct feed alternative, although utilization rates were expected to be limited on account of the general high alkali levels for South African iron ore.

There are theoretical short term alternatives like pellet but with the current situation in India, portside prices are unlikely to be attractive, a Chinese trader said. Brazilian lump may be considered on account of its alumina and silica levels, but they tend to have a much higher undersized rate, the source added.

(S&P Global Platts)

• [Editor:王可]