Low Alumina Iron Ore in high demand

This is something that hasn't been made available to us as it is always the generic heightened discounts for 58% grades vs 62% grades that the media, our company, BHP etc that are always drumming into us.

This is an interesting article that I came across that discuss the shift since the beginning of Jan 18 from high alumina to low alumina products. It also discusses the reduction of discounts for high silica products during the same time.

One thing Atlas always has had apart from its lump products is that the products are generally quite low in alumina. In the Mar 17 presentation, it advised that its products normally would follow the 57% fe adjusted index which is low ALumina.

Actually the ore produced from Webber has lower alumina content than most of BHP's ore. However, we are never going to hear this from anywhere.  (See below tables)

Whether or not our company has the sales team to maximise a potential "structural" change in the market and take advantage of the high demand for low alumina products, well that is anybody's guess but simply saying a product is 58% so the discount is high is a furphy without looking at the other characteristics of the products ie lump, alumina etc




https://www.hellenicshippingnews.co...rentials-evolve-as-market-fundamentals-shift/

Iron ore quality differentials evolve as market fundamentals shift​

in Commodity News​

24/05/2018​

Since January S&P Global Platts quality differentials for the gangue elements such as alumina, silica and phosphorous have evolved to reflect changing market fundamentals.
The alumina differential soared 100% from $1.50/dmt in January 2018 to $3.00/dmt in May 2018. Phosphorous has also seen large increases from a steady $1.30/dmt throughout the last quarter of 2017 to $2.50/dmt on May 18, where it has remained.​

LOW ALUMINA IN HIGH DEMAND
Aluminum and phosphorous have remained at elevated levels. In general, products from the Pilbara, Western Australia tend to have higher alumina than those from Brazil. A purchasing manager at a steel mill in the Hebei province said: “The higher premium on low-alumina cargoes and the larger discount on high alumina cargoes both suggest that BRBF price performance was stronger, even compared to Pilbara Blend Fines.”
The chart above shows Chinese port stocks of iron ore with a widening divergence by origin, with demand continuing to focus on low-alumina ores, reducing Brazilian stocks as Australian ore stocks rise. Adding to the tightness is declining Chinese domestic supply due to increased production costs for the first quarter of 2018. “Demand for cargoes with different specifications for sintering played a more important role when concluding the trades,” a Singapore-based trader said. “With the thinning out of low-alumina iron ore supply, mills were actively seeking low alumina feedstock, which were composed mainly of domestic Chinese concentrates or Brazilian materials.” Besides, the largest pellet supplier into China is India, sending around 800,000 mt/month of pellets. Indian pellets are generally higher in alumina than pellets from Brazil, historically the largest supplier of pellets into China prior to the Samarco incident.
High alumina levels can hurt productivity in the short term in the blast furnace by increasing the viscosity of the slag. This can slow the process of tapping the slag prior to the hot metal. Over the long term, high alumina can also cause a build-up of solids that precipitate from gas in the upper cooler zone on the blast furnace walls. It is possible that the build-up of solid matter can grow and eventually drop into the burden mix. This can cause a temporary cooling of the burden, reducing productivity and increasing coke demand to bring it back up to the required temperature..




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