ANALYSIS: Iron ore market appetite shifts to low alumina from low silica

Pricing for alumina and silica contents in seaborne iron ore underlines Chinese buyers’ increasing sensitivity towards alumina content in their shipments compared with the usual pickiness about silica.

Metal Bulletin’s monthly Value-In-Use (VIU) Indices show that the penalty or premium for 1% alumina stood at $3.24 per tonne on May 2, compared with a level of $2.80 per tonne on January 2.
The VIU for 1% silica on the other hand has narrowed to $2.73 per tonne on May 2 from $4.03 per tonne on January 2, the largest since its launch in December 2013.
The alumina VIU had hit $3.50 per tonne in March 2018, the biggest since its debut in October 2014.
These VIU-indices measure the price impact of each percentage point of that chemistry deviated from the benchmark grade, all other factors being equal.

The better reception of low-alumina iron ore has been underlined by recent transactions that show materials such as Brazilian Blend Fines (BRBF) with 1.5% alumina commanding a premium over Australian fines with typically more than...

Published

July Zhang

May 29, 2018

10:11 GMT

Shanghai