The average value-in-use adjusted iron ore cost is US$41.2/tonne (62% Fe fines basis, CFR China), 2.5% higher than a year ago. Adjustments for impurities such as alumina, silica and phosphorus have moved substantially which has affected VIU adjusted costs. The impurity adjustments have moved because of an increase in alumina content relative to silica content in the seaborne market. Phosphorus levels have also increased owing to the ramp up of BHP's Jimblebar mine. Steel mills are looking to maximise output because of high steel prices, and are penalising impurities that negatively affect productivity. We expect steel mill margins to remain positive and seaborne supply to continue shifting to more alumina and phosphorus content over the long term. As a result, adjustments for impurities will continue to be a major driver of VIU adjustments.