Iron Ore Canada declares force majeure after fire

UK-Australian producer Rio Tinto's joint venture Iron Ore Company of Canada (IOC) has declared force majeure on its contracts following a fire at its Sept-Iles port facilities on 31 March.

The fire at reclaimer No.2 was brought under control without injuries, minority owner Labrador Iron Ore Royalty said.

"The cause of the fire remains unknown at this time and an investigation process is ongoing, and IOC is still assessing the impact on its operation. IOC has declared force majeure on its contracts and is working with customers to minimise disruption," it said.

IOC produced 10.4mn t of pellet and concentrate in 2020, down from 10.5mn t in 2019. Rising domestic supplies of concentrate in China, one of IOC's main consumers, may cushion some of the impact from the supply disruption.

"Domestic concentrate supply is good and the price is much cheaper," a Singapore-based trader said. Falling prices for metallurgical coke could also reduce steelmakers' appetite for IOC's iron ore concentrate with lower alumina and silica content compared with other concentrates.

IOC concentrate has a specification of around 66pc Fe, less than 5pc silica, less than 0.30pc alumina, less than 0.02pc phosphorus, less than 0.01pc sulphur and around 3.2pc moisture, the trader said. Those lower levels consume less met coke in the blast furnace. Mills could shift to alternatives such as low-sulphur Ukrainian concentrate that has around 65pc Fe, 8-9pc silica, 0.30-0.50pc alumina, less than 0.1pc phosphorus, less than 0.06pc sulphur and around 11pc moisture, the trader said.

China's higher domestic production after winter has begun to weigh on floating premiums.

The Argus Ukrainian concentrate floating premium was assessed at $4.75/dry metric tonne (dmt) above the May 65pc fines index on 31 March, down by 60¢/dmt on the week. The Australian concentrate floating premium fell by 60¢/dmt to $4.25/dmt above the April 65pc fines index.

In terms of pellet trade, indicative bids for Ukrainian pellet stood at $40-52/dmt cfr above a 65pc index on 31 March, a wider range compared with $50-52/dmt on 24 March.

Rio Tinto owns 58.7pc of IOC's shares, while Japanese trader Mitsubishi has a 26.2pc stake and Labrador Iron Ore Royalty owns 15.1pc.