Glencore’s next steps in iron ore

Jun 15, 2012 | 11:35 AM |

The iron ore market has been waiting for a significant move from its highest profile new participant, trading major Glencore, since the commodities giant launched a standalone iron ore business in January 2012.
Anticipation built when Glencore announced its $90 billion merger with mining major Xstrata a month later. Both companies have put iron ore among their top priorities for new business.
In the absence of a major iron ore acquisition by Glencore or a merged Glenstrata, industry sources have questioned whether the company would have enough tonnage at its disposal to compete against more established rivals in the sector.
These include trading houses such as Asian major Noble and the in-house marketing teams at BHP Billiton, Rio Tinto and Vale, the world’s biggest producers of the steelmaking raw material.
A big-money merger is not the only way for Glencore to build its share in the seaborne iron ore market, however.
Industry insiders say that Glencore’s nascent iron ore business is being boosted by sales of iron ore produced by Australian mining majors to China, the world’s largest consumer of the steelmaking raw material.
Some sources claim that Glencore has already traded close to 20 million tonnes of iron ore thus far in 2012, double its 2011 sales total, and that a significant proportion of its sales have come from miners including BHP Billiton and Rio Tinto.  ....

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