China’s Flight to Quality
China, the largest global producer, consumer and importer of iron ore, is in the process of restructuring its steelmaking industry to reduce pollution, cut excess steelmaking capacity and improve efficiency and safety.
Operational efficiency in steelmaking requires the use of higher-quality feedstock. Quality higher-grade, lower-impurity feedstock produces more steel for each tonne used, with the added benefit of reducing steelmaking costs and emissions.China’s government-led initiative of reducing emissions and waste from low-tech steelmaking practices has led to the escalation of price differentials for quality between high- and low-grade iron ore products.
This is resulting in a structural shift in the price gap between high grade and low-grade iron ore products.
China’s shift towards higher-quality iron ore feedstock presents an opportunity for Magnetite Mines to become a leading global supplier of magnetite products to China’s steelmaking sector.