Insight
Why have high-grade iron ore premiums collapsed and will they recover?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Iron ore has been the star performer of 2019, with the benchmark 62% Fe index having gained almost 20% so far this year. But the premium end of the market has significantly under-performed, with the 65% Fe index up by just 6%. This is a reversal of 2018 when the big story for iron ore was widening grade/quality price spreads based on value-in-use. In this Insight we discuss why high-grade iron ore premiums have collapsed and what the future holds for this segment of the market.
Table of contents
- Setting the scene
- Where to from here?
- Why pay a premium for high grade ore?
- What about supply?
- Conclusion: it's a blip not a trend.
Tables and charts
This report includes the following images and tables:
-
Chart 1: high grade fines have under-performed the benchmark since mid-2018.Chart 2: we forecast a partial reversal of the spread contraction from 2020.Chart 3: correlation between high grade premium and steel margin.
-
Chart 4: correlation between high grade premium and coke price.Chart 5: supply of IOCJ up, high grade premium down.Chart 6: IOCJ fixed price assessments take a dive in Q3.Chart 7: high grade premium to recover from 2020.
What's included
This report contains:
Other reports you may be interested in
Insight
Value-in-use iron ore costs Q3 2025
Q3 2025 iron ore value-in-use adjusted costs are up 2.2% compared to last quarter, and margins remain at 40% in Q3 2025.
$5,000
Asset Report
Panzhihua-Xichang region iron ore mines
Panzhihua-Xichang is one of the lowest cost iron ore producing region in China.
$2,250
Insight
Value-in-use iron ore costs Q2 2025
Q2 2025 iron ore value-in-use adjusted costs are up 5.3% compared to last quarter, and margins decrease to 41% in Q2 2025.
$5,000
