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West Australian
4 days ago
- Business
- West Australian
Falling Pilbara iron ore quality sparks grade benchmark tweak
The iron ore industry's key pricing benchmark for seaborne cargoes will be lowered as the quality of supplies from biggest exporter Australia worsens. Platts, part of S&P Global Commodity Insights, will in January change its IODEX iron ore benchmark to 61 per cent iron content from the current 62 per cent, according to a notice to members on Tuesday. It also plans to update its 62.5 per cent China iron ore spot lump premium benchmark to 62 per cent. The proposed changes are in response to falling quality of Australian iron ore as mines in the nation's Pilbara mining hub age. Rio Tinto is facing this issue at some of its existing projects, prompting significant investment in the region to maintain revenues from the steelmaking material. 'It marks a shift in the market, where what was once considered a sub-benchmark grade is now a core part of global trade flows,' David Cachot, an iron ore research director at Wood Mackenzie, said in emailed comments. 'It's a move designed to better reflect the realities of today's market.' The iron content helps determine what price a customer pays and 62 per cent has been a common benchmark in the global seaborne market. It represents a middle ground of grades and is used as a base for negotiating premiums and discounts for different qualities in physical trades. Price reporting agency Platts also said that from Tuesday it began publishing a daily spread of the current and proposed prices, so that market participants can better understand the updates. With assistance from Alfred Cang. Bloomberg
Yahoo
17-04-2025
- Business
- Yahoo
Iron Ore Miners In Rocky Start to Year as Tariff Turmoil Begins
(Bloomberg) -- The world's biggest iron ore miners face a difficult start to the year, after extreme weather impacted production and as their biggest customer China braces for a trade war. Trump Signs Executive Orders on Federal Purchasing, Office Space How Did This Suburb Figure Out Mass Transit? DOGE Places Entire Staff of Federal Homelessness Agency on Leave Why the Best Bike Lanes Always Get Blamed LA County Floats Leaner Budget Burdened by Fire and Legal Costs This week, BHP Group Ltd., Rio Tinto Group, and Vale SA all reported drops in quarterly shipments from the year before, the result of disruptions from cyclones in Australia's Pilbara and heavy rains in northern Brazil. Rio was worst affected, with exports slumping 9% to a six-year low. That leaves the companies needing to play catch-up on their supply targets at a time when escalating tensions with the US could wreak havoc on the Chinese economy. The question now is whether Beijing will deliver enough stimulus to support demand for steel and its inputs, of which iron ore is key. 'We might see a recovery phase where these companies ramp up production to compensate for the lost output,' said David Cachot, an iron ore research director at Wood Mackenzie Ltd. 'Market participants are waiting to see what Beijing will do to further stimulate its economy, an additional source of concern the country did not need.' Market Dives Before the supply disruptions hit and trade tensions ratcheted higher, the iron ore market was contending with a surge in supply just as demand in China's maturing economy was dwindling. Still, benchmark iron ore futures in Singapore were steady, averaging around $103 a ton over the first three months, about the same as the previous quarter. But the market dived earlier this month, to below $95 a ton at one point, after the Trump administration announced punitive tariffs on China, and Beijing responded with its own eye-watering levies on the US. Now, China's economic targets are in doubt, and officials have set a clear goal of expanding domestic consumption to counter the hit to exports. That could lift demand for the steel used in vehicles, household durable goods and machinery. Iron ore traders are also probably hoping that Beijing doesn't ignore the playbook it has used during previous downturns, which involves splurging on more steel-intensive infrastructure to generate growth. BHP Chief Executive Officer Mike Henry warned on Thursday that slower global growth and a fragmented trading environment could have a significant impact on the company. 'China's ability to shift toward a consumption-led economy and for trade flows to adapt to the new environment will be key to sustaining the global outlook,' he said. --With assistance from Paul-Alain Hunt. GM's Mary Barra Has to Make a $35 Billion EV Bet Work in Trump's America Trade Tensions With China Clear Path for Salt-Powered Batteries How Mar-a-Lago Memberships Explain Trump's Tariff Obsession Trump Is Firing the Wrong People, on Purpose The Beauty Salon Recession Indicator ©2025 Bloomberg L.P.
