FE
Iron ore price hits multi-month lows as China demand concerns linger
Iron ore touched multi-month lows on Monday amid concerns over demand in top consumer China and rising portside ore inventories, although falling shipments helped pare some losses in the afternoon trading.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade little changed at 765 yuan ($107.40) a metric ton. The contract hit its lowest level since July 10 at 756 yuan earlier in the session.
The benchmark December iron ore on the Singapore Exchange was up 0.72% at $102 a ton, as of 07:25 GMT, after hitting its lowest level since September 1 at $100.85 earlier.
Prices were supported by lower global shipments, which slipped to the lowest level in two months, data from consultancy Mysteel showed.
Further signs of easing trade tensions between China and the United States also boosted risk appetite.
China said on Monday that it would suspend port fees levied on US-linked vessels for a year.
Meanwhile, data showing China’s producer price deflation eased in October and consumer prices returned to positive territory due to efforts to curb overcapacity and cut-throat competition among firms, also boosted sentiment.
However, price gains were curbed by pressure from lower demand amid wider production cuts triggered by losses.
That came even as some regions in northern China, including key steel production hub Tangshan, lifted environmental protection-led production controls from Sunday.
Resilient raw material prices and softening downstream demand have squeezed steel margins, propelling some mills to start equipment maintenance, said analysts.
Iron ore inventory at major Chinese ports rose 2.1% to 138.44 million tons – the highest since March 21- as of November 7 from the previous week, data from consultancy SteelHome showed.
Coking coal and coke, other steelmaking ingredients, slid 1.02% and 1.19%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange bucked the downtrend. Rebar added 0.26%, hot-rolled coil nudged up 0.06%, stainless steel advanced 0.28% while wire rod shed 0.12%.
($1 = 7.1230 Chinese yuan)
(By Amy Lv and Lewis Jackson; Editing by Subhranshu Sahu and Eileen Soreng)
Guinea to fast-track alumina, iron ore processing, minister says
Guinea will fast-track the development of alumina refineries and iron ore pellet plants to end decades of raw ore exports, its mines minister told reporters, as the country prepares for the first shipments from its huge Simandou iron ore mine this week.
In-country alumina and iron ore processing could transform Guinea’s economy by creating industrial jobs and reducing exposure to commodity price swings, the World Bank said in July.
Guinea ships about 60% of its bauxite, a feedstock for aluminum, to China, while a third of iron ore produced by the Simandou mine is destined for Chinese mills.
Conakry has signed its first alumina refinery deal with Chinese state-owned SPIC, with construction underway and completion due by end-2027, said Mines Minister Bouna Sylla.
Talks for additional plants are advanced with Chinalco and France’s Alteo, and ongoing with Compagnie des Bauxites de Guinee and Alcoa, he added.
“We are the biggest bauxite producer in the world now … but we don’t have any refineries built since colonial times,” Sylla said. “That will change.”
Six refineries by 2030
Guinea joins a raft of mineral-rich African countries from gold producer Mali to oil driller Nigeria that have pushed to boost domestic refining capacity in recent years, a step key to maximizing returns, boosting economic growth and reducing costly imports.
The country aims to install five to six alumina refineries by 2030, boosting domestic processing capacity to about 7 million metric tons annually, Sylla said.
The West African nation in August revoked a bauxite concession awarded to a unit of Emirates Global Aluminium after the firm failed to build a promised alumina refinery locally, according to the minister.
EGA did not immediately respond to a request for comment.
China’s alumina projects in Guinea won’t cut its dependence on the country as exports will simply shift to alumina from bauxite, Allison Ju of SMM said.
Guinea’s bauxite, low in silica and suited for low-temperature refining, underpins 25% of global aluminum output.
Iron ore processing
Beyond alumina, Sylla said Guinea is pushing for domestic processing of iron ore.
Current agreements require Rio Tinto and Winning Consortium Simandou, who are jointly developing the Simandou deposit, to study and build a 500,000-ton steel plant or a 2 million-ton pellet facility, Sylla said.
The partners must submit feasibility studies for a steel mill or pellet plant within two years of first exports, said Djiba Diakite, chief of staff to the president.
If they fail, Guinea can hire a top global firm at the expense of Compagnie du Transguineen — the joint venture managing Simandou’s rail and port services — for the study.
“We believe we have identified the minimum capacities to design (this facility) based on sound economic principles,” Sylla said.
Rio Tinto’s Simfer venture, which operates part of the Simandou project, has a commitment for a feasibility study on a pellet plant to help understand the viability and options available, a Rio Tinto spokesperson told Reuters on Monday.
WCS did not immediately respond to a request for comment.
Guinea’s proximity to Europe and the US gives it a logistics edge over Middle Eastern hubs, Sylla said, adding that producing pellets and direct reduced iron for green steel are the preferred path.
Energy remains the biggest hurdle, Sylla admitted, but said Guinea is courting hydro, solar and liquefied natural gas investments, including a US-backed plan to import LNG for power plants.
(By Maxwell Akalaare Adombila; Editing by Clara Denina and Jan Harvey)
The shipping mogul who carved a route to China’s African mining prize
When Sun Xiushun began to travel to Guinea just over a decade ago, he was an unknown shipowner desperate to stay in the aluminum game. He found the West African nation in the grip of an Ebola epidemic, with even the most hardened investors pulling out.
Sun — a Shandong native and long-time partner of aluminum giant China Hongqiao Group — dug in.
He needed a source of bauxite to replace Indonesia, a top supplier of the ore preparing to ban exports, and that meant connecting deposits in Guinea’s forested interior to a vast ecosystem of smelters in China. It took barges, floating cranes and the first new rail link in half a century, but the country became the single most important exporter and a vital supplier for the top metals market globally.
Now the one-time merchant seaman has repeated the feat, effectively unlocking the world’s largest untapped iron ore deposit with a more than 600-km (roughly 370-mile) railway across the country, bridges, tunnels and a purpose-built port — likely making himself a billionaire in the process.
One of the most storied projects of recent decades, Simandou, tucked away in Guinea’s mountainous south, lay in a state of suspended animation for years, becoming a byword for the Western industry’s apparent inability to build large-scale operations on time and on budget
This month, three decades after Rio Tinto Group was first given an exploration license, loading is beginning on the first shipment to be sent out from the new port of Morebaya — in large part thanks to Sun. The $23 billion project has become a study in why China continues to dominate African infrastructure. For many Western mining executives and advisors involved, it has also made a powerful case for collaboration with Chinese operators, even at a time of heightened geopolitical tension.
“For years, the challenge at Simandou was not the ore itself, but the formidable infrastructure needed to reach it,” said Qiang Fu, economist and professor in strategy and policy at the National University of Singapore. “By treating the railway and port as the strategic foundation rather than a secondary requirement, Sun redefined the venture and pushed it forward at a pace few expected.”
Sun’s methods are not those of large diversified miners. There is typically limited subcontracting and his personal interest, given a share of a portion of the main deposit and significant funds invested, encouraged him to press ahead even before others had signed on the dotted line. That urgency came with shortcuts — and reports of worker accidents. Still, by the time a co-development deal was signed in 2023, unlocking capital from other partners, nearly half the infrastructure was complete, at a lower-than-expected cost.
His goals and those of the Guinean government required him to move at speed, people on his team said, asking not to be named as the details of the negotiations are not public. And Sun did.
“Trading action for trust, and trust for resources, that’s the key strategy,” he said in a 2016 speech to students, recounted by people who heard it. “By fulfilling our promises, we earned high recognition from the government — and in return, access to the resources we needed.”
Simandou — so enormous and so rich that it could account for a tenth of the world’s supply of the steelmaking ingredient — has had an exceptionally fraught history. Its remote location makes access to the coast difficult and logistics, the toughest part of the challenge in any bulk-commodity operation, painfully costly. Add to that two coups, market vicissitudes, unwelcome government interventions and several corruption investigations. Real advances have taken years.
Rio initially held the entire deposit, but in 2008 it was seized by Guinea’s then president, unhappy with slow progress. A portion was handed to Israeli mining magnate Beny Steinmetz, who later brought in Brazil’s Vale SA. That venture ended in legal battles and graft allegations, and Steinmetz eventually agreed to walk away. Sun, having earned government trust with his bauxite operation, stepped in with his Singapore-based Winning International Group, in a consortium that took Simandou’s northern blocks in 2019.
Now surrounded by Chinese partners and rivals, Rio shares the southern half with Aluminum Corporation of China, or Chinalco, and other smaller holders. Guinea holds a minority stake in each half.
Rio Tinto declined to comment. Winning didn’t respond to emailed queries.
“Dealing directly with China is a way for us to deal with those that will provide funding for a project and also be the market for the project, making it bankable,” Abdoulaye Magassouba, mining minister until 2021, said in a January 2025 speech at Williams College in the US. And investors who are happy to dig even before all the paperwork is complete, he said — in an apparent reference to Sun — encourage confidence.
Digging in
Sun was born in 1964 to a farming family in Shandong and trained at a maritime school. Eager to travel, he spent nearly a decade working as a seaman and mechanic before rising through the ranks and eventually moving ashore to a unit of Cosco Shipping Holdings Co. in the northern Chinese port of Qingdao. Friends say those years left him with a straight-talking, direct manner, and with ambitions — but with little desire to stand out. An abstemious figure, he prioritizes home life in Singapore over the lengthy banquets favored by Chinese executives of high standing, often dispatching deputies to events in his place.
After Sun set up Winning in 2002, his mainstay was transporting bauxite for China Hongqiao — a business relationship that has meant close ties with the prominent Weiqiao family, who have close ties to the aluminum giant. It ultimately led to a connection with Zhang Bo, now chairman of Shandong Weiqiao Pioneering Group Co., who became one of his strongest allies and a source of significant financial support.
But his real break came after 2013, as Indonesia moved toward a bauxite ban. Sun lost no time in pivoting to Guinea, where he recognized both the poverty and the solution he could provide — infrastructure. Those experiences and connections laid the ground for what followed.
Building a bauxite port in the country’s north, he struggled to drag hundreds of thousands of tons of material onshore in what was a shallow basin. He flew in a 12-person specialist crew from the Chinese port of Yantai to survey tides, anchorages and approaches. Tugs had to haul barges to the shoreline, pull cargoes in, check for damage, and head back out.
It was, as one of his team described later, duct-tape logistics at an industrial scale.
But the bauxite link that emerged earned valuable trust. Construction began in March 2019 and completed in June 2021. At the inauguration, Magassouba, then still minister, shook Sun’s hand. “Since I was born, this is the first time Guinea has seen a railway completed and opened,” he said, according to people present at the gathering.
Sun saw the moment as a turning point. “What changed Simandou’s fate was that they saw our capability and strength,” he said in a rare newspaper interview earlier this year.
Rivals and traders, though, were skeptical back in 2019. Apart from his recent aluminum win, Sun had limited experience in mining. Bankers in Singapore and China were unwilling to back him or his consortium, formed with long-standing aluminum partner Hongqiao, and, later, with China Baowu Steel Group. So he poured in his own money, and relentlessly squeezed costs.
Instead of hiring a single engineering, procurement and construction company — the industry norm — Sun turned his company into a builder and operator, splitting work among dozens of specialist teams, with experienced Chinese crews working along thousands of local workers, people who worked on the project said. On the ground, he used the same hardline methods that served him well in the early years in Guinea, while building out bauxite infrastructure — hard milestones, daily reports and an eye only on what had been done that day. If a target slipped, teams were expected to fix it.
But Simandou was a challenge of a different order — where the Dapilon–Santou bauxite line ran for 125 km, the iron ore project was to be roughly five times that, and in far more complex terrain. Sun used fewer middlemen but more contractors, including units of China Railway Engineering and China Harbour Engineering. The pace rattled large Western incumbents, advisors said.
Again, Sun’s methods were idiosyncratic, reversing the traditional mining project timeline, which requires reserves to be confirmed first, then feasibility to be studied, before companies turn to logistics and infrastructure. Sun, playing to his strengths, turned to logistics first, and he used Chinese standards, Chinese cut-and-paste designs, Chinese materials and Chinese crews — just as rivals did in Indonesia and the Democratic Republic of Congo. He was on site himself almost throughout, thanks to a regular commute from Singapore to Conakry, via Paris.
A decade ago, he had kept working even through the Ebola epidemic with strict rules and three on-site doctors. Those methods were used again during the Covid pandemic, with bubble zones and mobile PCR testing stations to keep crews insulated and the project on track.
Speed and Sun’s relentless approach did not always produce smooth results, as the project advanced through villages in a rich and previously isolated equatorial ecosystem. There were fatalities, and the Guinean government said earlier this year it was looking into safety practices. (The Winning consortium has said previously that it works to constantly improve safety protocols and “ensure they meet international standards.”)
Still, Rio executives, for whom Simandou has been a long-standing headache as well as a tantalizing prospect, took notice of the advances after a trip to the bauxite operation in the north, and approached the group, according to people familiar with the conversations. Sun was not receptive. Executives on his team later recalled that he felt a partnership with the world’s second-largest miner meant he would get caught up in red tape, squandering the momentum he had built up.
A new Guinean government that took power after a 2021 coup, however, was eager to push development of the country’s flagship asset with a single, jointly backed rail line to the coast serving both halves of the deposit. Officials brokered a meeting with the then-chief executive officer of Rio, Jakob Stausholm, at the presidential palace. With an eye on the country’s uncertain politics, Sun took the hint.
To operate the shared corridor, the parties formed Compagnie du TransGuinéen, with state participation alongside Rio’s Simfer and Winning Consortium Simandou.
When loading accelerates and shipments finally begin, all parties will claim a much-needed victory — a gargantuan new mine for Rio, with some of the highest grades around, and a high-profile infrastructure win for China at a time when its big-ticket spending in Africa has cooled. Vice Premier Liu Guozhong will attend the official inauguration this week as President Xi Jinping’s representative.
“Simandou has presented an opportunity for China to remind the world that they are involved in Africa, and in a big way,” said Tara O’Connor, managing director of Africa Risk Consulting, who has followed the mine’s development for years. “The project is probably even more important to them now in the Trump era of tariffs and trade wars. It’s a show of force.”
(By Alfred Cang)
Vale gearing up to meet Indian demand as China steel output stagnates, CEO says
Brazilian miner Vale is preparing to meet rising iron ore demand from India, which could double its steel production by the end of the decade, chief executive Gustavo Pimenta told Reuters.
Rising sales to India and other Asian markets should help to offset stagnant demand from China, where steel production has flattened to near 1 billion metric tons annually and could decline slightly in coming years, he said.
“India has 1.6 billion people, has surpassed China, and needs massive infrastructure investments, which means a lot of steel,” Pimenta said in an interview at Vale’s Rio de Janeiro headquarters on Friday.
He said the capacity of India’s steel producers is likely to double to around 300 million tons in the next five to seven years.
Vale’s high-grade ore blends well with India’s lower-quality supply, Pimenta added, creating opportunities for both markets.
“We bring quality to the Indian mix. As steel output doubles, we see a big growth opportunity,” Pimenta said.
India is expected to import about 10 million tons of Vale’s ore this year, up from almost none a few years ago, but still a small fraction compared to China, which accounts for around 60% of Vale’s sales.
While China will remain the world’s top steel producer, Vale sees its output stabilizing. “We don’t see growth ahead. Chinese production will probably remain steady, perhaps even decline,” Pimenta said, contrasting that with India’s 12% annual growth.
Vale also expects rising demand from other Asian markets, with sales to Vietnam projected at 8 million tons in 2025, up sharply from previous years.
Vale Day
Strong third-quarter performance, including 5% sales growth and its highest iron ore output since 2018, positions Vale well ahead of a long-term strategy update to be detailed at its annual “Vale Day” investor event in New York on December 2.
Pimenta declined to comment on new production targets, but said Vale will outline projects to boost iron ore and copper capacity in its key Northern System operations.
Vale plans to invest 70 billion reais ($12.95 billion) by 2030 in its “Novo Carajas” program in Brazil, including a project to raise annual iron ore capacity by 20 million tons. Now 80% complete, the initiative is set to begin operations in late 2026.
“As we explore more of Carajas, we get increasingly optimistic about its potential,” Pimenta said. “At Vale Day, we’ll give investors more visibility and confidence.”
Vale also aims to double its copper output by 2035.
Amid expansion plans, Vale expects to reclaim the title of world’s largest iron ore producer this year, surpassing Rio Tinto, which took the lead after Vale’s 2019 Brumadinho dam disaster.
Outside Brazil, Vale is considering selling its Thompson nickel mine in Canada amid market interest and weak prices due to Indonesia’s surging output.
“It’s an asset we struggled to bring to the cost level we wanted,” Pimenta said. “We’re assessing if there’s a better owner.”
The mine produced about 10,000 tons in 2024, or 6% of Vale’s total.
($1 = 5.4039 reais)
(By Marta Nogueira, Roberto Samora and Marcela Ayres; Editing by Brad Haynes and Chris Reese)
