Global average value-in-use (VIU) adjusted costs have gone up 14% to US$41.13 in Q3 2017. The increase has been driven by a large rise in Australian VIU adjusted costs but also more recently by a 5% increase in costs in Brazil. Of particular note has been the rise in penalties for alumina and silica content. There is potential for downward pressure on VIU adjusted costs in the last quarter of 2017. Iron ore prices are expected to soften with lower demand in China as steel producers are forced to lower output during the winter months. Lump premiums have also improved which will help lower VIU adjusted costs. However, the reductions will be modest as large discounts for low-grade ore and high penalties for silica and alumina content are likely to remain. Longer term, we expect VIU adjusted costs to rise. Most of this will be driven by factors that producers are unable to control, especially fuel prices.