LCA Iron Ore Trade Report

Discussion board focusing on Great Lakes Shipping Question & Answer. From beginner to expert all posts are welcome.
Guest

Re: LCA Iron Ore Trade Report

Unread post by Guest »

Is the computer chip shortage as it relates to the automobile manufacturers still accounting for some of the lost tonnage? If things improve on that front, perhaps it could bring some vessels out of layup.
Guest

Re: LCA Iron Ore Trade Report

Unread post by Guest »

It's been posted in numerous threads that Electric Arc Furnaces are taking more and more steel production away from Blast Furnaces. I believe that as their technology gets better, the difference in the cost to make a ton of steel in an EAF vs BF is growing - that is it's getting cheaper and cheaper for the EAF.

There are now only 13 blast furnaces left in the US. All owned be either Cleveland Cliffs or USS. USS however has the option to make a ton of steel either in an EAF or a BF. Perhaps they are using their EAF's for more production or buying steel from other EAF companies to meet their customers needs. The latter might be cheaper than running their own furnaces.
Shipwatcher1
Posts: 450
Joined: April 19, 2011, 4:01 pm

Re: LCA Iron Ore Trade Report

Unread post by Shipwatcher1 »

Whatever has happened seemed to have taken place since winter lay up. Last season seemed to be strong enough for Cliffs to take a close look at the Ryerson. Now it seems across the board everything is soft. Several US lakers still at the wall, some Canadian vessels at the wall too.
Guest

Re: LCA Iron Ore Trade Report

Unread post by Guest »

The ore trade is tied directly to the steel market, which is usually one of the first market sectors affected by economic downturns and among the last to recover. Although some may disagree, I believe it can be successfully argued that we are either entering or are already in a new period of economic recession. With the current rate of inflation, increasing cost of labor, and rising fuel prices along with a plethora of other factors this recession could very likely be along the lines of the 2007-2009 recession, if not worse. Hopefully, this is not the case but there is a significant level of volatility in the stock market with daily swings of several hundred points on a daily basis with this averaging out to a sizable decline as is probably reflected in the current status of your 401k/IRA accounts. It is entirely normal for the economy to expand and retract so perhaps this particular cycle will be nothing out of the ordinary. As for shipping on the Great Lakes, if things don't improve by September I would not expect any of the vessels currently idle to return to service this season and it is equally likely that several more will be idled in the coming months. It is also possible that ships operating primarily in the ore trade will have shortened seasons if not sent into layup during early autumn.
Guest

Re: LCA Iron Ore Trade Report

Unread post by Guest »

Steel production from the integrated steel mills (i.e. blast furnaces) has declined since January, meanwhile production from the mini-mills in the Southern US is expanding and now surpasses production from the Great Lakes area by 206,000 tons a week.
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Guest

LCA Iron Ore Trade Report

Unread post by Guest »

An LCA article in the May 14 Boatnerd News post mentions that iron ore shipment totals are down significantly both in the month of April and the season to date. This is also noticeable given the number of vessels remaining in layup at the moment. Is this expected to be a short-term or long-term lull, and what is/are the economic factor(s) at play driving these changes? There have been rumblings about some vessels currently at the wall coming out before the end of the summer, so I'm curious as to what might be changing to warrant such a return to service.
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