James, the tonnage out of Silver Bay this Q2 will be around 2 million tons or an average of 650K tons per month. I did not kept up with the May traffic, I am in the fog so to speak. Royalty on 2 million tons is $1.22, than you have to add the ArcelorMittal settlement. We should see a Royalty close to $1.50 +- 10₡ for Q2. The CLF earnings projection are outstanding.
I was wondering if the entire tonnage mined off the Mesabi land is exported from Silver Bay. Duluth is not that far, can some be routed by rail through Duluth.
Tonnage for June is looking extremely good. Up to June 21, around 750K tons have left Silver Bay. With another 9 days to account for, it is looking like 800K tons will ship in June. This is awesome.
Yes Q2 will be at or close to 2 million tons. For the bulk carrier tonnage I use 64,400 tons for the 1000 footers and 34,400 tons for the 730 footers. Some are at 853 feet and 630 feet. You can pick up the length on the Lock posting. Some of these carrier can call on Silver Lake, like the Mesabi Miner, once a week or so. Their destination cannot be that far.
James Duart found 2 carriers calling on Sept Iles, using the Iroquois lock posting. James believe the one way trip to be 7 days, any comments. Aside from the Soo Lock, is Iroqois lock the only one on the St Laurent.
Yes, June is good so far. Your tonnage figures are too high. The SOO can only handle ships the have a draft of 28 feet or less. That means the 1000' ships can only carry about 60 to 62,000 tons/trip thru the SOO. Also Harbors Like Burns HArbor, Ind. can only handle ships with a draft of 27 feet. Again reducing the lead carried. My figures to the 21st are 668,000 tons with projected loads of 233,000 tons to be dhipped. Giving a June total 901,555 less 10%. LCA should have a figure of about 811,400 for June. That still is a very good month.
My source says that Qingdao will be or is building a special pier for these VLOC. The Chinese are good at that, they have build a special pier for the Wal-Mart 3 football fields long container ship. It will take times that all.
CLF by going seaborne trade is opening more potential customers. The Sept Ils port is the door to the seaborne trade, located at the northern mouth of the St Laurent it is well located for year around trade. Sept Ils was part of the Thomson deal. The potential IO tonnage traded toward Asia is very large. For CLF to get a share of it, the Minnesota mines will be put to use. Europe is not the huge market one may think it is. Europe has IO, true some is low quality or even polluted. Europe is a replacement market, same really for the US. The car US production was 9 million not too long ago, in 2010 it was 4 million. Think of the Chinese car production, 15% of the Chinese population has a car, and another 25% want one right away! That is a potential 225 million car or 22.5 million a year for 10 years.
True Australia is closer etc.. But the IO quality does not match the Minnesota mines having up to 67% fe. More the fe, less pellets tonnage used to produce steel.
As a MSB investor, I want to eliminate the winter down time because of the Soo Lock closing. If Sept Ils can store MSB IO we may be able to sale the 1.5 million tons production lost because of winter icing.
For the record, it is named and spelled: Port de Sept Iles. Iles is the French word for island. There are seven islands.
My apology for being pedantic, but the constant misspelling was . . .
<<CLF by going seaborne trade is opening more potential customers. The Sept Ils port is the door to the seaborne trade, located at the northern mouth of the St Laurent it is well located for year around trade.>>
CLF bought Portman for access to Asian markets, and they ship about 9M tons/year out of western Australia. CLF's operations in NA are relatively protected from dumping of foreign ore and steel, and that provides an awful lot of very attractive stability.
<<The Sept Ils port is the door to the seaborne trade, located at the northern mouth of the St Laurent it is well located for year around trade>>
The river that separates the US and Canada is called the St. Lawrence River or St. Lawrence Seaway, after Lawrence of Rome ( http://en.wikipedia.org/wiki/Lawrence_of_Rome ).
<<Europe is not the huge market one may think it is.>>
CLF has a total (NA and WA) production capacity around 40M tons/year, and vast majority of their NA production capacity is committed to NA customers for the next 5+ years. Rio Tinto has a WA capacity of 220M tons and Vale somewhere around 350M tons/year out of Brazil. CLF's impact in the international market is approximately zero. CLF's NA production is barely a month's worth of Vale shipments. Either Vale or Rio can increase their production by more than CLF's capacity with six month's notice. The point being that CLF does not need a huge market to sell into, and focusing on CLF sales to China is a little like trying to sell home-made brownies to WalMart: you're better off selling to the sandwich shop across the street. Chinese demand drives the market, but iron is iron, and you don't have to sell to China directly to get the "Chinese" price.
<<As a MSB investor, I want to eliminate the winter down time because of the Soo Lock closing.>>
That's not going to happen, and I don't think it's even an interesting proposal. It's not going to happen because the Soo Locks stand between Lake Superior and Everything. There is no way to ship by water out of Northshore to anywhere but another port on Lake Superior in winter, and shipping by rail is something between 50-100 times more expensive than by water. None of Lake Superior has access to any of the downstream lakes or ocean during winter. It's not interesting because the lack of shipments does not impede production. Northshore continues to operate all winter long, piling pellets up for shipment once shipping conditions permit. ie: Northshore is already doing exactly what you propose CLF do at Sept-Iles. Shipments of 1.5M tons/quarter represents their annual production of 5M tons concentrated into 3 quarters, but those 5M tons are produced at 1.2M tons/quarter. Even if Northshore shipped exactly the same tonnage every month, MSB's royalty would still have seasonal variation, because of the progressive royalty schedule.
Well, Vale's new VLOC seems to have been turned away from Dalian (China) and headed for Italy instead. Rumored to be too large to enter the harbor. Vale's ordered 18 of those 400k ton monsters with announced plans for 18 more. I'm sure there are deep water ports large enough to accommodate them - surely Qingdao - but it's a pretty big goof if they've sent their first super-large shipment to a port they can't get into.
China's a big importer, but so is Europe. If US/Canada do any ore exporting, the economics will strongly favor Europe. CLF has a lot of other sources of ore than Northshore and a lot of ways to grow their seaborne trade that don't involve their North American properties. Exports to China are a red herring when it comes to MSB. China is relevant in that they're the dominant buyer of a fungible resource, but they're not going to be a noticeable customer for Northshore.
Thanks for the post. I calculated the max tonnage from Silverbay to be 1,964,681 tonnes for Q2 through June 16th. Of course that's a max tonnage figure, and needs to be readjusted down to reflect that only 90% of the tonnes are coming from trust lands, and many of the boats weren't carrying their max tonnage. Several other posters on this board are a bit more adept than I in calculating these tonnage figures so I'll leave the final tonnage figures up to the professionals ;-) At the end of the day though this should be a good quarter. The tonnage looks solid, and the increase in price per tonne is very good as well. Hopefully Cliffs will give out part of the arbitration settlement to MSB this quarter as well.
Good Luck to All,
I really doubt the figure of 2MM tons shipped. According to Lake Carrier Association which shows actual tons ships from Silver Bay, April ship out was 568K, May was 471K and June will be about 5-600K. That makes max tonnage at 1.6MM tons. I would doubt the price per ton will be at $117...I would conservatively estimate $90.