How China's Surge of Iron Ore Imports Seems to be Impacting Global Steel Production - Seite 2

The news of the discovery further encouraged Ares' management and shareholders, as Walker added: "The Company and its staff are excited at the tangible near-term and long-term prospects, and are looking forward to commencing operations and being the only domestic supplier of metspar and acidspar to the U.S."

STEEL DEMANDS REBALANCING THE FLUORSPAR VALUE CHAIN

Prior to China's v-shaped recovery, predictions were being made regarding a rebalance of fluorspar's value chain.

Known also in the industrial space as fluorite, fluorspar is used to produce and trade globally two primary commercial grades: metallurgical and acid-grade.

Acid-grade product normally sells at a premium, and is used in making hydrofluoric acid and aluminum, while metallurgical (aka "met-spar") is primarily used in steel production.

Using a flotation method, Ares can upgrade its product easily from the natural occurring metspar to the premium acidspar, which comes with a nearly $200/tonne increase in price.

From an environmental standpoint, Ares's Lost Sheep product contains no sulphides or arsenic, unlike currently imported fluorspar from other parts of the world.

Steel mills require roughly 15-20lbs of fluorspar per ton of steel, while aluminum producers require 50-60lbs of high-grade fluorspar per ton of aluminum.

Ares has already established a customer base that exceeds US$10 million, and is in discussions with four major offtake partners. The mine is currently supplying small shipments of metgrade fluorspare to steel producers, however, Ares states that all of their metspar customers have also requested acidspar products.

In the US steel space, iron ore miner Cleveland-Cliffs Inc. (NYSE:CLF) shocked the market in September, with their plans to become a steel giant through the acquisition of ArcelorMittal USA from ArcelorMittal (NYSE:MT).

The unexpected transaction set Cleveland-Cliffs stocks ablaze, as shares went up 13.4% in midday trading, while ArcelorMittal shares soared more than 10%.

As the largest US producer of iron ore pellets, Cleveland-Cliffs announced a $1.4 billion purchase of ArcelorMittal's US assets, while recognizing that steel production in the US is recovering as auto plants resume operations.

"We have been through a very profitable quarter and very strong in terms of the recovery of demand particularly in automotive," said Cleveland-Cliffs CEO Lourenco Goncalves.