The import price of 62% Fe content ore at the Chinese port of Qingdao advanced again on Thursday trading at $ 68.49 per dry metric tonne according to data from Metal Bulletin. The price of the steelmaking raw material is now up nearly 30% from lows hit this time last year. Demand from top consumer China has stayed robust – cargoes for the first five months of 2018 now total 448m tonnes compared to just over 1 billion tonnes for the full year 2017.
There has also been a notable shift towards higher grade imported ore from Australia, Brazil and South Africa as Beijing shuts down inefficient low-quality domestic iron ore mines and tighten pollution controls on its heavy industry. World number three producer BHP announced on Thursday it has approved a $ 3.4 billion project (BHPs share is $ 2.9B) to replace depleting resources at its Western Australian operations and up its average grade from the Pilbara region in the process. BHP s South Flank project which should produce first ore in three years time will replace output at its Yandi 80-million-tonnes-per-year operation.
South Flank iron ore will contribute to an increase in the Melbourne-based companys average iron grade in Western Australia from 61% to 62%, and the overall proportion of lump from 25% to roughly 35%. BHP is targeting iron ore production of around 272m tonnes (on a 100% basis) in its current fiscal year.