The World Iron Ore Cost Curve includes: a) for non-China, 45 operating and 10 planned mines with a total capacity of 874 million metric tons, FOB the port of export; and b) for China, 45 individual mines, 10 steel-mill-weighted average cost mines and 21 provincial composite cost estimates with a combined capacity of 439 million metric tons, FOB the mine. The operating cost of the median-cost mine globally is $43 per metric ton. The preponderance of the high cost capacity is in China.
WSD's composite Pellet Cost Curve for non-Chinese facilities includes detailed process-by-process cost estimates--an approach appealing to mining engineers--for 22 operating pellet plants with 178 million tonnes of capacity, and four planned ones with 34 million tonnes of capacity. The median cost for four different types of pellets--acid, fluxed, low-silica fluxed and DR-grade--is $66 per metric ton, FOB the port of export.
Traditionally, blast furnace pellet prices have sold at a premium of $15-60 per metric ton to sinter fine prices. Typically, when iron ore prices are on the upswing, the pellet premium increases; and, when prices fall, the pellet premium decreases. DR-grade pellet historically have sold at a 5-10 percent premium over blast furnace pellet; often, they've been "sticky" on the downside when sinter fine prices decline.
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