Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Steel mills postpone BHP shipments

Article-Steel mills postpone BHP shipments

Steel mills postpone BHP shipments

Sydney: BHP Billiton has admitted its iron ore shipments could fall by as much as 28 per cent during the final two months of the year because difficulties in obtaining credit has forced some steel mills to postpone deliveries, the Sydney Morning Hearlad reported yesterday.
The admission - yet to be announced to the market - lays to rest BHP's insistence last week that its iron ore division was operating as normal even though rivals like Vale, Rio Tinto and Fortescue Metals have announced reductions in their ore production.
A BHP spokeswoman, Samantha Evans, said the miner still had no plans to cut production, but up to 6 million tonnes of shipments - worth $US600 million ($926 million) at benchmark prices - could be postponed until next year following feedback from customers.
She said BHP would attempt to sell the production into the spot market, which is trading at a 40 per cent discount to the benchmark price, but would not be drawn on the issue of further sales cutbacks if the market remained soft.
There are concerns in the industry that BHP's continued selling into the spot market at discount prices will serve to lower the benchmark price of iron ore - and therefore Australia's export and corporate tax revenues - even further next year.
But BHP is in a tough position, since it is seeking European Commission approval for its bid for Rio amid concerns about the combined company's dominance of the iron ore market.
At an investor briefing in London on Friday, Vale's chief financial officer, Fabio Barbosa, launched a thinly veiled attack on BHP for its lack of disclosure on iron ore sales in recent weeks.
"We cannot escape the reality. We must face it," he said. "We have been very, very transparent, as is our approach, and conveyed to markets our views about what is going on. In terms of production, we were the first leading company to announce a cutback in production because we most clearly understood the state of the market."
Frank Zhang, a representative of BHP's shipping agent, Wilhelmsen Ship Services in Port Hedland, told the Herald last week his company expected fewer ships to be chartered in coming weeks and noted loading of some ships had already been stalled while waiting for letters of credit.
Last week the miner cited several operational issues rather than lack of demand as the reason for lower shipments, even though the Herald reported the Port Hedland Port Authority website showed BHP was poised to make about 40 shipments this month, down from 60 in recent months. [17/11/08]

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.