After an underwhelming 2013, where statistics across a number of key indicators for iron ore reached their lowest point for the previous 7 years, many industry experts are predicting a resurgence for the steel making material in 2014. Iron ore prices had remained steady over the December 2013 quarter in the face of strong demand for ore, with the absence of the seasonal price weakness being a key contributing factor. Prices during this period were positively affected by the lower Australian dollar, an element that shows no sign of changing in the immediate future.
Many miners, predominantly blue chips and mid-tier organisations, with operations in Western Australia have recorded outstanding results at all levels of their business over the past 2 months. There is evidence that some of these companies have shipped record outputs during this period, with one relatively new site far exceeding feasibility study expectations. Following a large revenue decline in 2012-13 due to price falls, industry revenue is expected to rebound significantly in 2014.
Over the past five months Port Hedland posted a number of impressive months of export figures, and further targets are expected to be exceeded over the next 12 months. China has played a major part in this upswing as they are restocking after record levels of iron ore imports over the past few months. With inventories at Chinese ports being limited for many months, it is essential for purchasing to continue to keep their steel mills going.
The industry is expected to continue to experience strong growth patterns over the next five years as production volumes increase and prices stabilise then decline to boost demand. The health of the iron ore sector is largely tied to Chinese demand and will be heavily influenced by their steel trends, while a weaker Australian dollar is also expected to benefit domestic miners over iron ore producers in other countries. To highlight these facts, here in the Contec office we have had a number of key roles called in from iron ore clients in Western Australia over the past month. These roles include two Senior Mining Engineers, Mining Engineer- Drill & Blast, and Technical Services Manager.
Whatever view you take in regards to the mining industry, the seeds of the next major mining boom have already been planted. As a result of recent widespread belt tightening and low levels of capital and new investment, the time will come when demand for iron ore will far outweigh supply. And everyone knows what happens in this situation, boom!
Adam Lynch – Recruitment Consultant Contec Recruitment