Iron-ore producer Kumba Iron Ore’s export sales to major markets in Asia and Europe remain unaffected despite ongoing conflict in the Middle East.
Kumba CEO Mpumi Zikalala said the company has secured its supply chains for the rest of the year and continues to monitor developments closely.
Market routes ‘remain open’
“Kumba’s export sales routes to our markets in Asia and Europe remain open and have not been impacted by shipping disruptions caused by the conflict in the Middle East.
“Our supply chains have been secured for the remainder of this year, and we continue to closely monitor developments and manage potential associated risks, including cost inflation,” said Zikalala.
Mixed operational performance
This update comes as part of Kumba’s production and sales report for the first quarter ended March 31, which shows mixed operational performance.
Total production dropped by 2% to 8.8-million tonnes driven by a sharp decline at the Kolomela mine. Output at Kolomela declined by 15% to 2.5-million tonnes as the company drew down finished stock in preparation for a scheduled 10-day maintenance shutdown by Transnet in May.
Sishen increased production by 5% to 6.3-million supported by better feedstock quality and improved performance.
Logistics performance remained broadly stable but rail volumes to port slipped by 1% to 9.7-million tonnes. According to the report, this comes after adverse weather conditions that caused a rail washaway in February which affected 400 000 tonnes of iron ore shipments.
Sales volumes rise
Despite the disruption, sales volumes increased by 3% and this was supported by strong port stock levels and improved equipment performance at Saldanhla Bay.
Market conditions for iron ore remained relatively firm, with demand from China, the rest of Asia and Europe providing support. Supply was constrained towards the end of the quarter due to seasonal weather disruptions in the southern hemisphere.
Prices and lump premiums, which came under pressure earlier in the quarter weaker steel margins in China, recovered in March as mills restocked and increased blast furnace use.
Kumba reported an average iron content of 63.7%, slightly lower than a year earlier, and a lump-to-fine ratio of 66:34, reflecting fewer lump sales during a period of weaker premiums.
The company achieved an average realised free-on-board export price of $93 per wet metric tonne, about 8% higher than the benchmark price for 62% iron content.
- Kumba Iron Ore’s export sales to Asia and Europe remain stable despite Middle East conflict, with secured supply chains for the year.
- Total production fell 2% to 8.8 million tonnes, mainly due to a 15% drop at Kolomela mine ahead of a scheduled maintenance shutdown; Sishen mine output rose 5%.
- Rail logistics were slightly impacted, with a 1% decline in port rail volumes due to adverse weather causing a rail washaway in February.
- Sales volumes increased by 3%, supported by strong port stock and better equipment performance; market demand remains firm from China, Asia, and Europe.
- Average realized export price was $93 per wet metric tonne, 8% above benchmark for 62% iron content, despite earlier price pressure and weaker steel margins in China.
Iron-ore producer
“
“Our supply chains have been secured for the remainder of this year, and we continue to closely monitor developments and manage potential associated risks, including cost inflation,” said Zikalala.
Total production dropped by 2% to 8.8-million tonnes driven by a sharp decline at the Kolomela mine. Output at Kolomela declined by 15% to 2.5-million tonnes as the company drew down finished stock in preparation for a scheduled 10-day maintenance shutdown by Transnet in May.
Logistics performance remained broadly stable but rail volumes to port slipped by 1% to 9.7-million tonnes.
Despite the disruption, sales volumes increased by 3% and this was supported by strong port stock levels and improved equipment performance at
Market conditions for iron ore remained relatively firm, with demand from China, the rest of Asia and Europe providing support. Supply was constrained towards the end of the quarter due to seasonal weather disruptions in the southern hemisphere.
Prices and lump premiums, which came under pressure earlier in the quarter weaker steel margins in China, recovered in March as mills restocked and increased blast furnace use.
