Perth — A comfortable consensus is emerging in the iron ore market that China’s vast steel industry has undergone a structural change that has resulted in quality iron ore gaining a permanent advantage over lower grades. Certainly, the common theme of presentations at this week’s Global Iron Ore and Steel Forecast Conference in Perth was that the current premium of ore with a higher iron content is now a defining characteristic of China’s market. This shift matters as China buys about two thirds of global seaborne iron ore, with the vast majority of the annual demand of more than 1-billion tonnes coming from Australia and Brazil, with SA a distant third. The industry benchmark is ore with an iron content of 62%, a quality level that is met by most Brazilian ore, as well as by top Australian miner Rio Tinto. BHP, Australia’s second-ranked producer, comes close to this level with its output, but third-ranked Fortescue Metals Group delivers a grade closer to the 58% level. China’s swit...
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