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China's closed iron ore mines unlikely to restart


China's closed iron ore mines unlikely to restart

Report summary

Despite high iron ore prices, we do not expect closed Chinese mines to restart production. Based on costs alone, an iron ore price of US$80/tonne is enough to incentivise almost 100 million tonnes of Chinese capacity to restart. But the reality of reopening mines is more complex than just considering costs. The main factors against restarts include expectations that prices will fall, lack of finance and environmental licencing. Most Chinese industry participants we have contacted expect Chinese domestic concentrate production to fall, not rise, this year. We hold the same view. We expect prices to fall towards US$50/tonne by the end of the year, leading to a further drop in Chinese production of around 20 million tonnes as lower-cost imports displace higher-cost domestic supply.

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  • China's closed iron ore mines unlikely to restart PDF - 252.07 KB 3 Pages, 0 Tables, 2 Figures
  • Chinas closed iron ore mines unlikely to restart.xlsx XLSX - 124.06 KB

Description

This Metals Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For industry participants and advisors who want to look at the trends, risks and issues surrounding this topic, this report gives you an expert point of view to help inform your decision making.

Our analysts are based in the markets they analyse and work with high-quality proprietary data to provide consistent and reliable insight.

We provide unique in-depth analysis of the metals supply industry so you can make confident strategic decisions.

  • Executive summary
  • Incentive price for reopening Chinese mines
  • Lack of finance, lower prices and permitting will impede restarts

In this report there are 2 tables or charts, including:

  • Executive summary
  • Incentive price for reopening Chinese mines
    • China restart incentive curve 2017 (62% Fe fines equivalent)
    • Potential private capacity re-starts at different prices
  • Lack of finance, lower prices and permitting will impede restarts
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