| |
4 Pages

Iron ore fines breakeven costs 2016

Iron ore fines breakeven costs 2016

Report summary

For the last three months, around 10% of seaborne iron ore fines in our dataset have been selling at below breakeven cost. With the four major producers accounting for 89% of seaborne fines supply in our dataset, all other suppliers of iron ore fines are achieving only slender margins or operating at a loss. The recent rally in iron ore prices to US$46/dmt has provided relief for several iron ore producers. This is particularly true for South African mines that have breakeven costs between US$36/dmt to US$37/dmt. However, the rise in prices has not been sufficient for Australian juniors to be cash positive. We also have doubts about the sustainability of the recent rally in iron ore prices. We expect Chinese iron ore demand to contract further in 2016, and with production costs continuing to fall, there is more downside than upside to prices in the near term.

What's included?

This report includes 2 file(s)

  • Iron ore fines breakeven costs 2016 PDF - 353.14 KB 4 Pages, 1 Tables, 2 Figures
  • Iron ore fines breakeven cost 2016.xls XLS - 220.50 KB


This Metals Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For industry participants and advisors who want to look at the trends, risks and issues surrounding this topic, this report gives you an expert point of view to help inform your decision making.

Our analysts are based in the markets they analyse and work with high-quality proprietary data to provide consistent and reliable insight.

We provide unique in-depth analysis of the metals supply industry so you can make confident strategic decisions.

  • Key findings
    • The iron ore majors are still earning good margins
    • Anglo American Kumba's re-configuration has lowered its breakeven costs
    • Entire Australian junior iron ore sector is cash negative
    • Tax reduction not sufficient to support Indian exports
  • Breakeven cost methodology

In this report there are 3 tables or charts, including:

  • Key findings
  • Breakeven cost methodology
    • Exchange rate assumptions Q1 2016
Requester's name : .............
Department : .............
Authoriser's Name : .............
Authoriser's signature : .............
Date : .............
Cost Centre : .............

Questions about this report?

Frequently Asked Questions
  • Europe: +44 131 243 4699
  • Americas: +1 713 470 1900
  • Asia Pacific: +61 2 8224 8898
contact us

Why Wood Mackenzie?

Wood Mackenzie, a Verisk Analytics business, has been a trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, empowering clients to make better strategic decisions with objective analysis and advice.

We work across every sector of oil, gas, power, renewables, chemicals, metals and mining, covering more than 150 countries. Our proprietary data and models are at the core of everything we do, ensuring our independent asset and company valuations are thoroughly robust and that we offer an accurate forward-looking view of economic indicators such as market supply, demand and price trends.

Our 500+ analysts are based in the regions they cover, cultivating an unrivalled depth of understanding to help clients accurately identify new opportunities, define their strategy and improve business performance.

At every stage, our teams readily collaborate and share their insight to provide an integrated perspective across entire industries. It is this unique and rigorous analytical approach that ensures we are recognised as the industry standard by the world’s most innovative organisations.