Latest news with #Simandou
Business Upturn
5 days ago
- Business
- Business Upturn
NMDC shares drop over 2% as Citi and Kotak reiterates ‘Sell' ratings
By Aman Shukla Published on June 16, 2025, 09:38 IST NMDC shares slipped over 2% in morning trade after leading brokerages Citi and Kotak Institutional Equities reiterated their 'Sell' calls, highlighting risks of further price correction in the domestic iron ore market. Citi has set a target price of ₹60, while Kotak has pegged it even lower at ₹55. Citi noted that NMDC's current price premium to export parity stands at over 40%, significantly above the FY25 average of 20%. With domestic steel prices declining and imports rising in May 2025 compared to April, the brokerage expects this premium to normalize. Adding to the pressure, Lloyds Metal and Energy plans to increase its iron ore capacity from 10 million tonnes to 25 million tonnes in FY26. Citi also flagged a modest global iron ore surplus, especially with Simandou volumes expected to enter the market in 2026. Kotak emphasized NMDC's recent 2.5% month-on-month price cut in June, and noted that domestic prices are now just 8% below import parity — well below the long-term average of 20%. The brokerage expects further cuts, citing weak steel prices and rising merchant mining output as additional downside risks. With concerns over domestic and global supply, and weakening pricing power, NMDC could face headwinds in the near term, both brokerages warned. NMDC shares opened at ₹70.20 and touched an intraday high of ₹70.24, while the low stood at ₹68.50. The stock continues to trade within its 52-week range, with a high of ₹91.87 and a low of ₹59.53. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Ahmedabad Plane Crash Aman Shukla is a post-graduate in mass communication . A media enthusiast who has a strong hold on communication ,content writing and copy writing. Aman is currently working as journalist at
Business Upturn
5 days ago
- Business
- Business Upturn
NMDC stock gets negative ratings by Citi and Kotak; pricing concerns weigh on outlook
By Markets Desk Published on June 16, 2025, 07:56 IST Citi and Kotak Institutional Equities have both reiterated 'Sell' ratings on NMDC, citing risks of further price corrections in the domestic iron ore market. Citi has set a target price of ₹60, while Kotak has pegged its target at ₹55. According to Citi, NMDC's current price premium to export parity stands at over 40%, compared to the FY25 average of 20%. The brokerage expects this premium to normalize, especially as domestic steel prices correct amid rising imports in May 2025, outpacing April volumes. Further, Llyods Metal and Energy's plan to ramp up its iron ore capacity from 10 million tonnes to 25 million tonnes in FY26 could also put pressure on prices. Global iron ore supply is expected to remain in modest surplus, especially with Simandou volumes entering the market next year, Citi warned. Kotak, meanwhile, highlighted NMDC's 2.5% month-on-month price cut in June, and believes more reductions could follow. It noted that domestic iron ore prices are now at just an 8% discount to import parity, compared to the historical 20%, signaling a possible price normalization phase. The ongoing weakness in steel prices and increase in merchant mining output further exacerbate the pressure on NMDC's pricing power, the brokerage added. Ahmedabad Plane Crash Markets Desk at
Business Times
04-06-2025
- Business
- Business Times
Iron ore markets head for shake-up as Singapore-linked Simandou nears production
[SINGAPORE] Global iron ore trade is facing a pivotal shift as Simandou, a massive iron ore mine in Guinea being developed by a Singapore conglomerate, is about to ramp up supply of the ferrous mineral. Estimated at 2.4 billion tonnes of high-grade iron ore as one of the world's richest untapped deposits, and projected to start production by end-2025, Simandou is a strategic project for China as it aims to diversify its suppliers from Australia and Brazil – the two countries together accounting for about 80 per cent of seaborne iron ore exports. As a long-anticipated supply disruptor, the project is closely monitored by the iron ore industry, which is also betting on India to absorb demand lost in China, based on panel discussions during Singapore International Ferrous Week. Two blocks of the mining concession are being developed by Winning Consortium Simandou (WCS), a joint venture led by Singapore-based mine-to-shipping conglomerate Winning International Group. This is in partnership with China Shandong Weiqiao Group and state-owned China Baowu Steel Group. The remaining two blocks are under a Simfer joint venture, led by British-Australian mining giant Rio Tinto, in partnership with China's Chalco Iron Ore, and the Guinea government. At full capacity, the mine is projected to produce up to 120 million tonnes of high-grade iron ore (about 65 per cent iron content) annually. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Trade implications Cheong Jin Yu, head of Baltic Exchange Asia, told The Business Times that Baltic Exchange is keeping an eye on the development of Simandou as a key force to change trade routes of iron ore. 'What I would imagine would happen is that, if and when Simandou becomes a consistent supplier into the iron ore market, the (Baltic Exchange's) advisory council will tell us it's time to start pricing a route out of. So it will be a West Africa-to-China route,' he said. He added that once an index is established, the exchange would then develop different tools such as futures for the new index for market players to manage freight volatilities. The impact of Simandou's supply on key iron ore routes such as China-Australia hinges on actual cargo flows, Cheong said, with markets awaiting clarity. Vamsi Goutam, chief commercial officer of Tata Steel Minerals Canada, said during a panel that Simandou's supply could push up volumes and potentially freight rates in the Atlantic trades. He expects 'freight balancing' as shipping capacity might not pick up at the same rate as the steep increase in dry bulk volume. De-risking for iron ore producers The expected influx of high-grade iron ore from Simandou might worsen an oversupply situation as China's demand growth softens, which would put more pressure on iron ore producers. 'A lot of producers who are high on the cost curves will come under pressure,' said Claire Chong, senior analyst of Thurlestone Shipping, noting that their operational resilience will come into play. Francois Lavoie, senior vice-president of sales of technical market and product development at Champion Iron, said that as Simandou is 'mixing things up', small producers such as Champion Iron are trying to diversify offerings as part of their de-risk strategy. This includes converting production into iron ore of even higher grades and lower impurities, he noted. India's rising appetite Baltic Exchange's Cheong noted that the industry is also monitoring how iron ore imports to India would evolve, as the second-largest steel producer in the world ramps up its production. Paul Bartholomew, lead analyst of S&P Global Commodity Insights, noted that India is expected to emerge as a major iron ore importer, with the import forecast in 2026 to more than double from 2024's imports. However, Thurlestone Shipping's Chong noted that despite a rising projection, India's iron ore imports are still 'too small to compare with China's'. While India's iron ore import is expected to hit more than 130 million tonnes, China's iron ore imports are projected to stay above 1.1 billion tonnes to 2035, S&P Global indicated.
Business Times
04-06-2025
- Business
- Business Times
Iron ore markets brace for shake-up as Singapore-linked Simandou nears production
[SINGAPORE] Global iron ore trade is facing a pivotal shift as Simandou, a massive iron ore mine in Guinea being developed by a Singapore conglomerate, is about to ramp up supply of the ferrous mineral. Estimated at 2.4 billion tonnes of high-grade iron ore as one of the world's richest untapped deposits, and projected to start production by end-2025, Simandou is a strategic project for China as it aims to diversify its suppliers from Australia and Brazil – the two countries together accounting for about 80 per cent of seaborne iron ore exports. As a long-anticipated supply disruptor, the project is closely monitored by the iron ore industry, which is also betting on India to absorb demand lost in China, based on panel discussions during Singapore International Ferrous Week. Two blocks of the mining concession are being developed by Winning Consortium Simandou (WCS), a joint venture led by Singapore-based mine-to-shipping conglomerate Winning International Group. This is in partnership with China Shandong Weiqiao Group and state-owned China Baowu Steel Group. The remaining two blocks are under a Simfer joint venture, led by British-Australian mining giant Rio Tinto, in partnership with China's Chalco Iron Ore, and the Guinea government. At full capacity, the mine is projected to produce up to 120 million tonnes of high-grade iron ore (about 65 per cent iron content) annually. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Trade implications Cheong Jin Yu, head of Baltic Exchange Asia, told The Business Times that Baltic Exchange is keeping an eye on the development of Simandou as a key force to change trade routes of iron ore. 'What I would imagine would happen is that, if and when Simandou becomes a consistent supplier into the iron ore market, the (Baltic Exchange's) advisory council will tell us it's time to start pricing a route out of. So it will be a West Africa-to-China route,' he said. He added that once an index is established, the exchange would then develop different tools such as futures for the new index for market players to manage freight volatilities. The impact of Simandou's supply on key iron ore routes such as China-Australia hinges on actual cargo flows, Cheong said, with markets awaiting clarity. Vamsi Goutam, chief commercial officer of Tata Steel Minerals Canada, said during a panel that Simandou's supply could push up volumes and potentially freight rates in the Atlantic trades. He expects 'freight balancing' as shipping capacity might not pick up at the same rate as the steep increase in dry bulk volume. De-risking for iron ore producers The expected influx of high-grade iron ore from Simandou might worsen an oversupply situation as China's demand growth softens, which would put more pressure on iron ore producers. 'A lot of producers who are high on the cost curves will come under pressure,' said Claire Chong, senior analyst of Thurlestone Shipping, noting that their operational resilience will come into play. Francois Lavoie, senior vice-president of sales of technical market and product development at Champion Iron, said that as Simandou is 'mixing things up', small producers such as Champion Iron are trying to diversify offerings as part of their de-risk strategy. This includes converting production into iron ore of even higher grades and lower impurities, he noted. India's rising appetite Baltic Exchange's Cheong noted that the industry is also monitoring how iron ore imports to India would evolve, as the second-largest steel producer in the world ramps up its production. Paul Bartholomew, lead analyst of S&P Global Commodity Insights, noted that India is expected to emerge as a major iron ore importer, with the import forecast in 2026 to more than double from 2024's imports. However, Thurlestone Shipping's Chong noted that despite a rising projection, India's iron ore imports are still 'too small to compare with China's'. While India's iron ore import is expected to hit more than 130 million tonnes, China's iron ore imports are projected to stay above 1.1 billion tonnes to 2035, S&P Global indicated.
Reuters
30-05-2025
- Business
- Reuters
Iron ore pessimism subsides despite looming Simandou supply
SINGAPORE, May 30 (Reuters) - The prospects for iron ore prices are improving thanks to a lower than expected global surplus this year, analysts and traders say, though looming new supply from the giant Simandou project in Guinea remains a long-term downside risk for prices. Analysts and traders have cut their oversupply forecasts for this year to between 20 million and 30 million metric tons, from 50 million tons earlier this year, according to more than a dozen interviews at the flagship Singapore International Ferrous Week conference this week. That is because demand has been surprisingly resilient so far this year thanks to robust steel exports as buyers stocked up amid signs of an escalating global trade war, while cyclones disrupted supply in major producer Australia. In the first four months of 2025, China's iron ore imports slid 5.5% year-on-year while its crude steel output ticked up 0.4%, official data showed. Iron ore prices have held well above $90 per ton, below which high-cost miners struggle to break even, despite trade tensions between the world's top two economies that have fueled concerns about the outlook for steel demand. That has led analysts and traders to revise up their bearish-case pricing scenarios to between $80 and $85 per ton versus $75 or lower at the start of the year. Medium term demand for iron ore should remain firm because China's young fleet of blast furnaces will require iron ore for at least another decade, said analysts. "There won't be any big reduction in the number of blast furnaces in China by 2035 from the perspective of the life cycle of the currently running equipment, meaning that iron ore procurement will hover at a relatively high level," Long Hongming, a professor from Anhui University of Technology, told the conference on Tuesday. Simandou, one of the world's largest high-grade iron ore mines, will start shipping ore in November, and its entry into the global market is expected to aggravate the supply glut starting 2026. However, the increasingly hostile attitude of Guinea's military government, which recently cancelled 129 minerals exploration permits and is locked in a standoff with Emirates Global Aluminium, raised concerns among traders, miners, analysts and steel mills at the conference in Singapore. Participants questioned whether the government's activist stance could affect how smoothly the project will be able to ramp up to its full production of 120 million tons a year. Simandou is a joint venture between Rio Tinto ( opens new tab, the world's largest iron ore miner, and Chinese companies including China Baowu, the world's largest steelmaker by output.
