Insight
Why have high-grade iron ore premiums collapsed and will they recover?
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 7 images and tables including:
- 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:
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