Australia's Atlas Iron in May made its first iron ore sale for delivery into India and is looking to add other Asian and European destinations, it said in a presentation Tuesday.
China has been Atlas' traditional offtake market, with the miner selling around 75% of its iron ore on term contracts and the balance through spot deals during the March quarter to small and medium Chinese steel mills and trading houses, the company said previously.
Atlas told a Sydney conference that iron ore prices have weakened significantly since the start of the year due to rising supply.
"Increasing supply is placing further downward pressure on 58% Fe products, with significantly increased discounts to the 62% index being experienced for that product while the market adjusts to accommodate the increased presence of this style of product," it said, according to a copy of the presentation.
Iron ore prices are currently around $91.75/mt CFR North China, according to Platts data.
Atlas said higher-cost producers in China and other countries outside Australia and Brazil are facing challenging economics at current prices, which it expects will tighten supply.
But the Australian miner said the recent A$1.4 billion ($1.3 billion) bid by China's Baosteel to acquire Aquila Resources "vindicates the long-term need in China for 58% Fe product in expanding volumes, with Australia the preferred source of supply."
Atlas said Tuesday it shipped more than 2 million mt of iron ore in April-May and set a record high for shipments at 1.25 million mt in May.
The company's production guidance for this fiscal year remains at 10.2 million-10.7 million mt, with cash costs in the range of A$49-52/mt, it said.
