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A surprise increase in 2016 margins: Global iron ore supply summary

A surprise increase in 2016 margins: Global iron ore supply summary

Report summary

Global seaborne export margins are estimated to be US$24.30/tonne for 2016 as a whole. However, in December 2016, with iron ore prices of more than US$70/tonne, average seaborne export margins are US$45/tonne - the highest since 2014. This is a pleasant surprise for producers but is not likely to last. Price volatility will continue and we expect prices to average below US$50/tonne over the next two years and seaborne margins to fall below US$20/tonne. Average global total cash costs have fallen an estimated 8% over 2016 to US$27/ tonne. However we expect costs to gradually increase over the next few years as fuel prices rise and productivity gains become more difficult to achieve. Our estimated average capital intensity for 2016 is US$122/tonne, down from US$149/tonne in 2015.  Any new projects that are approved will be at a much lower capital intensity than in previous years.

What's included?

This report includes 3 file(s)

  • A surprise increase in 2016 margins: Global iron ore supply summary PDF - 436.89 KB 18 Pages, 19 Tables, 7 Figures
  • 2016 Global Summary upload.xls XLS - 2.62 MB
  • 2016 Iron ore global supply summary fiscal data.xls XLS - 137.50 KB


This Iron Ore Supply Summary report details key producers, production levels, costs and margins for iron ore assets in this country. It also analyses industry trends and themes, giving insight into future cost direction.

Industry participants, advisers and financial institutions can use this report to understand key country data in order to identify operational efficiency and competitive drives, as well as identify acquisition opportunities.

Wood Mackenzie's cost methodology is the established global industry standard, relied on by the world’s leading investment banks and mining companies to make strategic, operational and investment decisions.

Our analysts are based in the markets they analyse, working with high-quality proprietary cost databases and cost curve analyses to create consistent and reliable analysis. Our database includes over 2,450 asset analyses covering more than 1,000 companies worldwide.

  • Executive summary
  • Key companies
    • Vale
    • Rio Tinto
    • BHP Billiton
    • Fortescue
  • Reserves and resources
  • Production
  • Quality
  • Costs
    • Operating costs
    • Delivered costs
    • Capital costs
      • Capital expenditure by project category (nominal to 2016 and real thereafter)
  • Margins
  • Fiscal terms
    • Brazil
    • Cameroon
    • Canada
    • China
    • Liberia
    • Russia
    • Ukraine

In this report there are 26 tables or charts, including:

  • Executive summary
  • Key companies
    • Attributable marketable production by key company
    • 2016 split of attributable marketable production
  • Reserves and resources
  • Production
  • Quality
  • Costs
    • 2016 Global total cash cost curve (US$/tonne) FOB / ex mine
    • Average total cash cost 2009 – 2030 (US$/tonne, nominal to 2016 real thereafter)
    • Delivered iron ore cash costs, CFR North China 2016 US$/dmt 62% Fe fines equivalent
    • Costs: Image 4
  • Margins
    • 2016 Global operating margin curve (US$/tonne)
  • Fiscal terms
    • Australia
    • Fiscal terms: Table 2
    • Fiscal terms: Table 3
    • Fiscal terms: Table 4
    • Chile
    • Fiscal terms: Table 6
    • Guinea
    • India
    • Kazakhstan
    • Fiscal terms: Table 10
    • Mauritania
    • Peru
    • Republic of Congo
    • Fiscal terms: Table 14
    • Sierra Leone
    • South Africa
    • Sweden
    • Fiscal terms: Table 18
    • United States
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