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Value-in-use adjusted iron ore costs Q4 2019

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09 December 2019

Value-in-use adjusted iron ore costs Q4 2019

Report summary

The average value-in-use (VIU) adjusted iron ore cost for Q4 2019 rose just 0.7% last quarter. If we look at the costs at a country level, Brazil's value-in-use costs have remained flat but there has been an increase in Australia's value-in-use adjusted costs of 3.4% so far this quarter. Chinese costs, in contrast, are down 6.1% compared to last quarter. Australia's value-in-use costs have been negatively impacted by lower premiums for lump ore and higher penalties for phosphorus. Improved premiums for higher grade ore has had a marginally positive impact on Brazil's VIU adjusted costs over the past few weeks, but this has been offset by higher freight rates. Chinese costs are down because of an 8% rise in ex-mine cash costs as well improved premiums for low-phosphorus material.

Table of contents

  • Executive Summary
  • Lower lump premiums and higher phos penalties
  • Freight rates update
  • Iron ore margins have peaked
  • Value-in-use assumptions

Tables and charts

This report includes 7 images and tables including:

  • 2019 Value-in-use adjusted cost curve (CFR China, 62% FE fines equivalent)
  • VIU adjusted cost by country (CFR China)
  • VIU adjusted cost by percentile (CFR China)
  • Cash operating margins
  • Seaborne iron ore cash costs by operator (CFR China, 62% Fe fines unadjusted)
  • Seaborne iron ore cash costs by operator (CFR China, 62% Fe fines equivalent)
  • 2019 China value-in-use adjusted cost curve (62% Fe fines equivalent)

What's included

This report contains:

  • Document

    China_delivered_VIU_adjusted_costs_Q4 2019.xlsx

    XLSX 577.98 KB

  • Document

    Value-in-use adjusted iron ore costs Q4 2019

    PDF 816.41 KB

  • Document

    Value-in-use adjusted iron ore costs Q4 2019

    ZIP 1.26 MB

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