Insight
| |
6 Pages

Value-in-use adjusted iron ore costs Q3 2017


Value-in-use adjusted iron ore costs Q3 2017

Report summary

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.

What's included?

This report includes 2 file(s)

  • Value-in-use adjusted iron ore costs Q3 2017 PDF - 312.33 KB 6 Pages, 0 Tables, 7 Figures
  • china_delivered_viu_adjusted_costs_q3-2017.xls XLS - 1.71 MB

Description

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.

  • Value-in-use adjusted costs continue to rise
  • High penalties for silica impact Brazilian iron ore
  • Margins improved in Q3 2017 on the back of higher iron ore prices
  • Chinese supply marginal cost

In this report there are 7 tables or charts, including:

  • Value-in-use adjusted costs continue to rise
    • CFR China cash cost by country
    • CFR China cash cost by percentile
  • High penalties for silica impact Brazilian iron ore
    • 2017 CFR North China cash cost curve (62% Fe fines equivalent)
    • Seaborne iron ore cash cost by operator 2017 (CFR China, unadjusted for quality)
    • Seaborne iron ore cash costs by operator (CFR China, 62% Fe fines equivalent)
  • Margins improved in Q3 2017 on the back of higher iron ore prices
    • Cash Operating margins
  • Chinese supply marginal cost
    • China full cost curve 2017 (62% Fe fines equivalent)
Requester's name : .............
Department : .............
Authoriser's Name : .............
Authoriser's signature : .............
Date : .............
Cost Centre : .............

Questions about this report?

Frequently Asked Questions

Mailenquiries@woodmac.com
  • Europe: +44 131 243 4699
  • Americas: +1 713 470 1900
  • Asia Pacific: +61 2 8224 8898
contact us

Why Wood Mackenzie?

As the trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, we empower clients to make better strategic decisions with objective analysis and advice. Find out more...