Insight
Value-in-use iron ore costs Q3 2026
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The average global VIU iron ore cost for Q3 2026 rose to US$67.7/t on a 62% Fe fines basis, CFR China – up 1.3% from Q2 2026 and 13.1% higher than the previous year. On a 61% Fe fines basis, CFR China, the average VIU cost was US$65.3/t. We have updated iron ore costs for Australia, India and China for Q3 2026. Q3 2026 iron ore production costs rose due to the Middle East conflict and the blockade of the Strait of Hormuz, which pushed international oil prices above US$100 per barrel and nearly doubled Singapore diesel prices in Q2 2026. Although oil prices declined somewhat in Q3, we still expect the average Brent crude oil price in the second half of this year to remain above US$95/bbl. Since mining operations across extraction, inland logistics and beneficiation are heavily dependent on diesel and electricity, this energy inflation directly increased C1 cash costs throughout the production chain.
Table of contents
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Executive summary
- Dual-benchmark era
- Cost dynamics
- Price performance
- Margin outlook
- Key risks
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Iron ore prices are set to keep falling through Q4 2026
- 2025
- 2026
-
Geopolitical risk and firm shipments are keeping freight rates elevated
- 2025: Volatility and Q4 Recovery
- 2026: Geopolitical Risk and Structural Support (Q1-Q3)
- Market Disruption (Q1 2026)
- Iron Ore Dynamics
- Market Continuation (Q3 2026)
- 2027 Outlook and Key Risk Factors
-
Lump and pellet premiums diverge from a shared playbook
- Lump premiums climb towards a four-year high, but face Q4 downside risk
- Pellet premiums extend gains, but face similar downside risk into Q4
- 2025
- 2026
- High- and low-grade fines spreads move in opposite directions
-
Global cash margin to decrease in Q3 2026
- Price trajectory: 2025
- Price trajectory: 2026 year to date
- Margins by country
- Mining capital expenditure
- Australia
- Brazil
- Others
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China's high-cost domestic supply is losing ground to cheaper seaborne ore
- 2025
- 2026
- Mining investment
- Outlook
- VIU assumptions
Tables and charts
This report includes the following images and tables:
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Q3 2026 VIU adjusted cost by country (CFR China) - 62%Q3 2026 VIU adjusted cost by percentile (CFR China) - 62%Q3 2026 VIU adjusted cost by country (CFR China) - 61%
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Q3 2026 VIU adjusted cost by percentile (CFR China) - 61%Q3 2026 VIU adjusted iron ore cost curve (CFR China, 62% Fe fines equivalent)Q3 2026 VIU adjusted iron ore cost curve (CFR China, 61% Fe fines equivalent)Q3 2026 seaborne iron ore cash costs by operator (CFR China, unadjusted for quality)Q3 2026 seaborne iron ore cash costs by operator (CFR China, 62% Fe fines equivalent)Q3 2026 seaborne iron ore cash costs by operator (CFR China, 61% Fe fines equivalent)
- 2 more item(s)...
What's included
This report contains:
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