The price of the iron ore products sold by CAP Mineria -- the mining branch of Chile's integrated steel group CAP -- shrunk 31.8% in the second quarter to $51.90/mt from $76.10/mt in the same period last year, the company said Monday in its quarterly report.
Lower prices generated a 30.2% reduction in net sales to $162.67 million, despite a 26.5% growth in shipments to 3.66 million mt.
In the year's first half CAP Mineria's shipments totaled 6.29 million mt (up 15.1% from H1 2014) and prices averaged $57.30/mt (down 35.5%), composing net sales of $309.1 million (down 39.4%).
"Following an optimization of the product mix in H1, shipments of pellets reached 27.5% of total while in H1 2014 they were 16%. This is due to programming stronger production of high-grade pellets aiming to obtain their price premiums. Similarly, during H1 2015 production of high-quality sinter feed was intensified due to its low cost of production that enables to obtain better margins," the company said.
"Customers in Asia and the Middle East maintain demand for high-grade concentrates produced by the miner (particularly 67-69% Fe pellet-feed and 65-67% Fe pellets). Despite the increasing iron ore offer in 2015, competitive advantages of these products provide easier selling and premiums," the company said.
The miner's net profit plunged 75.8% in H1 $21.1 million. It accounts for most of CAP Group profit, which fell 72.2% in the period to $12.75 million.
Source: Platts
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