[Ferro-Alloys.com] UK-Australian mining company BHP has maintained its iron ore production guidance at 276mn-286mn t in the July 2020 to June 2021 financial year, but is warning of a double-digit percentage drop in steel production outside of China.
BHP produced 281mn t of iron ore in 2019-20. It operated at a run rate of over 300mn t/yr in April-June but said a major maintenance programme on one of its car dumpers at Port Hedland in the Pilbara region of Western Australia (WA) would impact production in July-September.
China can produce more steel and pig iron in 2020 than in 2019, assuming it can avoid a second wave of Covid-19, BHP said. But it warns that steel production is likely to decrease by more than 10pc outside of China, with utilisation rates falling to 50-60pc in April-June. The weakness in the iron ore market outside of China is less important for price formation than in other commodities, it added.
BHP sells around 80pc of its iron ore to China, initial shipping data indicate. It achieved an average iron ore price of $76.67/wet metric tonne (wmt) fob Port Hedland in January-June, down from $78.30/wmt in July-December 2019. Argus last assessed the 62pc Fe price at $108.95/dry metric tonne (dmt) cfr Qingdao on 20 July, down slightly from an 11-month high of $112.40/dmt on 14 July.
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