Buy and Sell Iron Ore on OreTrade

The Iron Ore Market

Iron ore is the primary raw material for global steel production, and steel is the foundation of modern infrastructure , from buildings and bridges to vehicles and machinery. With over 2.5 billion tonnes traded internationally each year, iron ore is one of the highest-volume commodities in the world.

The vast majority of global iron ore supply comes from three countries: Australia (which accounts for around 53% of global seaborne exports), Brazil (roughly 20%, primarily from Vale's operations in Minas Gerais and Pará), and South Africa (a growing exporter of both fines and lump). China is by far the world's largest importer, consuming over 70% of seaborne iron ore to feed its massive steel industry.

Iron ore is typically traded in three physical forms: fines (particles under 6.3mm, the most common form), lump (coarser material that can be charged directly into a blast furnace), and pellets (processed and balled material used in direct reduction steelmaking). Each has its own price premium or discount relative to the benchmark grade.

How Iron Ore is Priced

The benchmark for iron ore pricing is the 62% Fe CFR China price, published by Platts (S&P Global) and Fastmarkets MB. Cargoes trade at premiums or discounts to this benchmark based on grade, form, and origin. A high-grade 65% Fe cargo from the Pilbara commands a significant premium over a 57% Fe cargo from a lower-grade deposit. Alumina, silica, phosphorus and moisture content all affect the final realised price.

Transactions are typically settled on CFR (Cost and Freight) or FOB (Free on Board) basis, with cargo sizes ranging from 50,000 to 200,000 dry metric tonnes (DMT) for Capesize shipments. Pricing periods are commonly based on the monthly average of the relevant index, or agreed quotational periods around bill of lading date.