Rio Tinto’s Canadian IOC iron ore shipments may resume in June after strike

4th june 2018

A strike at Rio Tinto’s Iron Ore Company of Canada, which threatened to take out a quarter of sales, appears close to ending, with iron ore pellet shipments estimated to resume before the end of June.

Terminal workers based in Sept-Iles are voting after colleagues at the mine and processing site agreed terms after being on strike since the end of March.

Both groups of workers are represented by United Steelworkers. The rail and port operation is crucial to restart shipping from the Labrador Trough via the St Lawrence Seaway.

USW locals 5795 and 6731 in Labrador City voted on Monday to accept the latest offer presented by management and union representatives, while voting by USW Local 9344 for Sept-Iles concludes Tuesday.

A market source said iron ore concentrate mining and shipments are likely to restart as soon as possible, while turning pellet plants back on and preparation ahead of commercial output may see pellet shipments follow some weeks after the strike ends.

“From mine to port, around three weeks for pellet is to be estimated,” a source close to the matter said. “Concentrate is straightforward and available from day one.”

To pick up material faster, customers taking both pellets and concentrates and typically using Capesizes may use smaller vessels as restocking is prioritized. Customers are mainly contract-based in Europe and northeast Asia.

Outside Canada, problems with production in Brazil of high grade iron ore grades may tighten the market longer term, and aid premiums, sources said.

Iron ore miner CSN declared force majeure due to a trucking strike, as advised to customers in a notice Monday. The trucking strike relates to diesel supplies and is affecting wider industry and logistics in the country.

Anglo American’s huge Minas-Rio pellet feed project in Brazil has been suspended while safety checks are carried out and is expected to return in the fourth quarter.

Customers including in China and the Persona Gulf are showing strong demand for concentrate ore and pellet feed, a supplier source said.

“I see large demand for concentrate for the next half-year,” he said. “If pellet is available today, the offer today is higher” than previous annual contract levels.

The iron ore concentrate market was said to be pricing at Platts 65% Fe fines index, adjusted up basis dry mt unit for iron content with additional $2-$3/mt premiums. Pellet feed is currently commanding spot premiums of $7-$10/mt against the same basis, a supplier said.

Source: PLATTS