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China iron ore cost curve H2 2015

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Report summary

We estimate the average total cash cost of Chinese iron ore mines is US$66/dmt in 2015 US$5/dmt lower than our H1 2015 estimate. The downgrade in costs is because of weaker than expected demand in the non contestable market leading to additional closures of high cost mines. The private closures and state owned enterprise (SOE) production cuts have totalled 17 million tonnes in the non contestable market. Existing mines also continue to cut costs to survive. One measure we are now seeing is mines increasing mass recovery by mining higher Fe grade raw ore essentially high grading the deposits and lowering concentrate Fe grades to recover more concentrates with the same input of raw ore. We estimate the cost saving from mass recovery increase is US$3/dmt. We've also observed almost all SOE mines continue to cut wages.

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    China iron ore cost curve H2 2015

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  • China iron ore cost curve 2015
  • China iron ore cost curve H2 2015: Image 2
  • Iron ore production drop in 2015 (Million tonnes)
  • China iron ore total cash cost

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