Chinese traders say June loan deadlines driving ore price down
Chinese iron ore traders are dumping stocks ahead of a June deadline to repay bank loans, warns an industry player who says demand remain weak, according to the Australian Financial Review.
Ji Minlei, a trader who operates from the port of Rizhao, said pressure from banks partly explained why the iron ore price had dipped below $US100 a tonne for the first time since September 2012.
“Some traders have been caught in the liquidity crunch and have been forced to sell,” he said via phone on Tuesday.
Banks had been increasingly tightening credit this year and were now demanding deposits of up to 30% to finance cargoes, double the previous level, he said.
Mining pain to continue, says BGC
Conditions in the mining services sector are at their worst in almost two decades and many players will struggle for survival, the head of BGC’s mining contracting arm has told The Australian.
Speaking publicly for the first time since the death of BGC founder and executive chairman Len Buckeridge earlier this year, BGC Contracting chief executive Greg Heylen said he expected to see more pain in the contracting space as increasingly desperate companies scrambled for work.
“Some contractors are still issuing prices (for contracts) that we just can’t compete at and I think that will result in some consolidation of contractors over the next two to three years,” Heylen said.
“They just can’t survive at those prices.”
Gas sale seen as favoured option in Arrow talks
The Arrow Energy joint venture in Queensland between Shell and PetroChina is nearing decision-time on the fate of its coalseam gas resources, with an outright gas sale shaping up as the most likely outcome, according to the Australian Financial Review.
Arrow is understood to have held talks in March with all three of Queensland’s LNG projects under development, BG Group’s Queensland Curtis venture, Santos’s GLNG and Origin Energy’s APLNG.
A range of options have been canvassed, from a straight sale of gas resources to a broader deal that would give the Arrow partners a stake in an LNG plant or some supplies.
