Resource Capital Research („RCR‰), an equity research company which focuses on small and mid size resource companies, today published its quarterly research report covering iron ore exploration and development companies. RCR also publishes quarterly reviews of the Uranium and Gold sectors.

Key Points
Iron Ore Market:
  • The iron ore spot price reached an all time high of US$186.5/t (China fines, 62% Fe, CFB) in April 2010 but has since dropped by 23% to US$143.1/t (June 17).
  • As of 2Q10, contract iron ore prices are set quarterly and indexed to the average spot price for the previous three months. The 3Q10 contract, indexed to March-May 2010 spot, is forecast to increase by 23% over 2Q10 to US$148/t (FOB, 62% Fe).
  • After a strong recovery from 2009, steel production and prices are now flat or falling slightly. Global crude steel production has increased 35.7% year-on-year and 9.6% quarter-on-quarter but fell slightly (-0.4%) in the 30 days to June 17. Prices for steel products have followed a similar trend.

Iron Ore Equities:
  • Australian listed iron ore stocks have gained an average 50% in 12 months, driven by the overall market recovery and rising iron ore prices. Prices fell 12% in three months and 7% in one month (to June 17), partly due to concerns over the proposed new resources tax (RSPT).
  • Similarly, Canadian listed iron ore stocks have gained an average 48% in 12 mon