Steelmakers pay for iron units and penalise impurities. Understanding fines, lump and pellets, and the role of silica, alumina and phosphorus, is essential when structuring an iron ore cargo.
Iron ore is not a single product. Fines, lump and pellets behave differently in the blast furnace and command different values. Beyond iron content, the levels of silica, alumina, phosphorus and sulphur determine how a cargo is priced and whether it is suitable for a particular mill.
Fe content
Higher iron content means more iron units per tonne and lower slag volumes, which improves furnace productivity. Mills therefore reference price against benchmark grades and apply premiums or discounts for higher or lower Fe.
Impurities
Silica and alumina increase slag volume and coke consumption. Phosphorus and sulphur affect steel quality and must be removed at additional cost. Contracts typically specify maximum levels with penalty schedules.
Inspection and assay
Independent sampling, moisture determination and assay at the load port protect both parties. Draft survey establishes the quantity shipped. Wityz International arranges these services as standard on iron ore cargoes.
Articles are provided for general information only and do not constitute an offer, financial or investment advice, or a guarantee of market outcomes.