The seaborne iron ore lump premium has fallen by 74% over the past two months as steel mills reduced usage of lump in the steel-making process due to thin steel margins, preferring to use domestic ores and imported fines in their feedstock blending ratio.
S&P Global Platts assessed the iron ore spot lump premium at 12 cents/dry mt unit on August 30, which was the lowest level since January last year. At the end of June, the premium stood at 473 cents/dmtu.
As domestic concentrate prices have been consistently lower than imported iron ore this year, steelmakers located in northern China have preferred domestic concentrate or pellets over imported lump.
“Usage of lump ore in the feedstock ratio fell by at least 3% in the past six months,” a