Mid West iron ore players were this week buoyed by the rising iron ore price, but are still wary of volatility in the market ahead of this month’s presidential changeover in China.
Shanghai rebar futures and iron ore indexes earlier this week showed iron ore at $120 per tonne, a jump of more than 15 per cent on the back of three-year lows reached in September.
Local iron ore producer Mount Gibson Iron this week said that it was encouraged by the recent firming in iron ore prices, and remained confident that China’s growth still had a “long way” to run.
However, it still held concerns about the uncertainty in the short to medium term outlook as was evidenced by recently jobs cuts from its Mid West operations.
Mount Gibson’s chief executive Jim Bayer said the Mid West remained central to the company’s long-term plans, particularly given its significant export capacity at Geraldton.
“We are committed to doing everything we can to identify opportunities that will ensure we remain a long-term player in the region,” he said.
Mount Gibson said it would continue to implement measures to ensure it could “weather the lean times” and capture the benefits of stronger conditions when they occur.
Sinosteel Midwest Corporation also trimmed its workforce recently.
The company’s general manager Phil Allsopp said the cuts were necessary given market volatility and high operating costs.
“The issue has not only been price but the volatility in the iron ore price, the strong Australian dollar and the increasing cost of doing business in WA,” he said this week.
“SMC believes we have made the right decision, and we are currently in the process of conducting a value improvement study to ensure we can commit to the Blue Hills project with confi dence when all these factors positively align.”
Gindalbie Metals investor relations manager Michael Weir would not comment on the iron ore price but was pleased the company could continue to strengthen its logistics chain.
“We are currently running two trains per day from Karara to Geraldton, and this will soon increase to three,” he said.
“We’ve loaded three vessels so far and are quickly closing in on our first quarter of a million tonne milestone.”