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Value-in-use adjusted iron ore costs Q3 2019

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22 August 2019

Value-in-use adjusted iron ore costs Q3 2019

Report summary

The average value-in-use (VIU) adjusted iron ore cost is US$40.0/dry tonne (62% Fe fines basis, CFR China), up 3.2% compared with last quarter. The rise is mostly because of higher ocean freight costs and lower premiums for high-grade iron ore. Brazilian VIU adjusted costs have risen by over 5% compared with last quarter owing to the long distance from Brazil to China, and because Brazil mostly produces high-grade ore. In contrast, Australian costs have remained stable as higher ocean freight costs have been offset by lower price discounts for low-grade iron ore, of which Australia is a major supplier. The associated Excel download provides mine-by-mine and company VIU adjusted costs. As well as our full China cost curve on a VIU adjusted basis.

Table of contents

  • Executive summary
  • Ocean freight rates soar in July
  • Iron ore price spreads narrow as steel margins collapse
  • Margins surge to 6-year-high but have now peaked
  • Chinese miners benefiting from improved prices
  • Value-in-use assumptions

Tables and charts

This report includes 9 images and tables including:

  • 2019 Value-in-use adjusted cost curve (CFR China, 62% FE fines equivalent)
  • VIU adjusted cash cost by country (CFR China)
  • VIU adjusted cash cost by percentile (CFR China)
  • Cash operating margins
  • 2019 Capesize ocean freight rates
  • 2019 Iron ore price spreads
  • Seaborne iron ore cash costs by operator (CFR China, unadjusted for quality)
  • Seaborne iron ore cash costs by operator (CFR China, VIU adjusted)
  • 2019 China value-in-use adjusted cost curve (62% Fe fines equivalent)

What's included

This report contains:

  • Document

    China_delivered_VIU_adjusted_costs_Q3 2019.xls

    XLS 1.53 MB

  • Document

    Value-in-use adjusted iron ore costs Q3 2019

    PDF 853.04 KB

  • Document

    Value-in-use adjusted iron ore costs Q3 2019

    ZIP 1.19 MB

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