Probably negligible in the next 20 years. After 20 years I see more of a market for green steel.
The reason is the blast furnaces are huge investments with long lead times, they don't just change their product overnight, we're talking decades.
Grade discount changes a lot based on the cost of coal (and many other factors), as lower grades require more coal, so when coal was expensive the gap widended.
Now china has cheap coal, the 58% to 62% gap is back to only 12%, from 40% last year. so its very cyclical.
JAN LAST YEAR
"If it was all about low grades I'm sure twiggy would have build something a lot easier."
He did.... "The Iron Bridge project development was initiated in 2010", back then FMG shipped
40mtpa, now were doing
200mtpa, so thats 5 times increase/investment in low grade iron ore (cheap, plentiful & profitable) whilst Iron Bridge project was developing.
Twiggy will definitely place a bet both ways. Once Iron Bridge is working.... plant sorted, FMG should buy this.... or HIO buy the FMG engineers
(20min delay)