# Iron ore: Characteristics

Why silica and phosphorus cut the price of ore

Source page: https://www.materialinsights.org/commodities/iron_ore/characteristics/

What this tab covers The supply and physical characteristics of the commodity. Supply: current production, inventories and stocks, capacity utilisation, geographic and producer concentration, how fast supply responds to price, the project pipeline and capital spending, and logistics and export flows. Material: the physical and chemical properties that set its grade, price and end uses (for example purity and conductivity for metals, API gravity, sulfur and energy content for fuels, moisture, protein and fibre quality for crops).

#### Supply volume characteristics

| Characteristic | Figure | What it means | Source |
|---|---|---|---|
| **Current production volume** | about 2.6 Bt usable ore, 1.6 Bt Fe content (2025e) | Australia mined 980 Mt, Brazil 420 Mt, India 310 Mt and China 290 Mt of usable ore. Chinese ore is low grade, so on an iron-content basis China (180 Mt Fe) is below India (190 Mt Fe). | USGS MCS 2026 |
| **Inventory and stock levels** | Chinese port stocks typically about 120-150 Mt (indicative), roughly 5-6 weeks of China's imports; US mine, dock and plant stocks 3.6 Mt (end-2025) | Port stocks in China are the market's main buffer and are tracked weekly by Mysteel and SMM. Steel mills also hold several weeks of ore at plant. There is no strategic stockpile of iron ore. | USGS MCS 2026; Chinese port stock range indicative (Mysteel) |
| **Capacity utilisation** | not published globally; the four majors run close to nameplate | Vale, Rio Tinto, BHP and Fortescue plan to fill their rail and port systems and adjust mainly through mine sequencing. In the US, one operator idled two mines with 10 Mt a year of capacity in March 2025 to cut stockpiles, and output fell 16% to 38 Mt. | USGS MCS 2026; company reports |
| **Geographic and producer concentration** | Australia 37.3%, top-3 66.9% (Australia, Brazil, China), HHI 2,007 (2024, Fe content); Vale, Rio Tinto, BHP and Fortescue about 44% of world usable ore | The seaborne market is more concentrated than mine output: Australia supplied 55.4% and Brazil 20.1% of 2024 export value. Company share: Vale 336 Mt, Rio Tinto 327 Mt, BHP 290 Mt (2025 or FY2025) and Fortescue 198 Mt (FY2025) of about 2,600 Mt. | World Mining Data 2026; UN Comtrade 2024; company reports via content_v2 |
| **Supply elasticity** | low: 2-4 years for brownfield expansions, 10-30 years for greenfield provinces | Majors can debottleneck rail and ports within a few years, and Indian and Chinese mines respond faster to price. Simandou in Guinea, known since the 1990s, shipped its first ore only in December 2025. Chinese domestic mines are high cost and shut first when prices fall. | content_v2 supercycle (Rio Tinto); lead times indicative |
| **Project pipeline and CapEx** | Simandou: SimFer mine rated 60 Mt/yr, with the whole project planned at about 120 Mt/yr (indicative); US Minnesota 7 Mt/yr mine and pellet plant from 2026 | Simandou's first ore shipped in December 2025 and is high grade (about 65% Fe, indicative), which suits lower-carbon steelmaking. In Minnesota, construction restarted on a 7 Mt a year mine and pelletising plant due in early 2026. | Rio Tinto via content_v2; USGS MCS 2026; full-project capacity indicative |
| **Logistics and export flows** | 2024 exports worth $148 billion; Australia 55.4%, Brazil 20.1%; China took 73.6% of imports | Pilbara ore travels on private railways (Rio Tinto runs about 1,600 km) to Port Hedland and Dampier, then by Capesize to China. Carajas ore rides 890 km to Ponta da Madeira and goes on 400,000 t Valemax ships. The traded share of output rose from under 40% in the early 1970s to 69% in 2013. Chokepoints are single rail lines, cyclone seasons and a few ports. | UN Comtrade 2024 (HS 2601); Smil 2016; Humphreys |

#### Material characteristics Industrial mineral

Iron ore is priced on iron content and on what else it carries. Silica, alumina, phosphorus and sulphur add slag, coke use and cost in the blast furnace, so a 62% Fe benchmark is adjusted up or down for grade and impurities. Physical form (lump, fines or pellets) and moisture also set price, because they decide whether ore can be charged directly or must be sintered.

| Property | Value / specification | Why it matters | Source |
|---|---|---|---|
| **Iron content (grade)** | benchmark 62% Fe fines; also 58% and 65% Fe indices; Pilbara about 62%, Brazilian itabirite about 50% before beneficiation, Chinese ores about 30% | Higher grade means less slag, less coke per tonne of hot metal and less CO2; premiums for 65% Fe widen when mills chase emissions and productivity | Platts IODEX methodology; Smil 2016 |
| **Silica and alumina** | IODEX 62% reference: SiO2 4.0%, Al2O3 2.25% | Each extra percentage point of gangue raises slag volume and fuel rate; Indian fines are often high in alumina, which penalises them | Platts IODEX specification (indicative) |
| **Phosphorus and sulphur** | IODEX reference: P 0.09%, S 0.02% | Both embrittle steel and must be removed at extra cost, so cargoes above limits are discounted or blended | Platts IODEX specification (indicative) |
| **Moisture** | reference about 8% (wet basis); priced per dry metric tonne unit | Water is paid freight but not iron; very wet fines can liquefy in ship holds (IMSBC Code Group A rules) | Platts IODEX; IMO IMSBC Code |
| **Physical form and size** | lump 6-31.5 mm; fines under about 10 mm; pellets 9-16 mm at 63-67% Fe | Lump and pellets go straight into the furnace and save sintering; DR-grade pellets (about 67% Fe, low gangue) are needed for gas-based DRI and hydrogen steel | industry standard sizes (indicative) |
| **Pellet strength** | cold compressive strength typically at least 250 kg per pellet (indicative) | Weak pellets break into fines during shipping and in the furnace, cutting gas flow and output | ISO 4700 test method (indicative threshold) |

## Other sections

- [Summary](https://www.materialinsights.org/commodities/iron_ore/index.md)
- [Overview](https://www.materialinsights.org/commodities/iron_ore/overview/index.md)
- [Correlation](https://www.materialinsights.org/commodities/iron_ore/correlation/index.md)
- [Extraction](https://www.materialinsights.org/commodities/iron_ore/extraction/index.md)
- [Production](https://www.materialinsights.org/commodities/iron_ore/production/index.md)
- [Stocks](https://www.materialinsights.org/commodities/iron_ore/stocks/index.md)
- [Cycles](https://www.materialinsights.org/commodities/iron_ore/cycles/index.md)
- [Trading](https://www.materialinsights.org/commodities/iron_ore/trading/index.md)
- [Movement](https://www.materialinsights.org/commodities/iron_ore/movement/index.md)
- [Criticality](https://www.materialinsights.org/commodities/iron_ore/criticality/index.md)
- [Emissions](https://www.materialinsights.org/commodities/iron_ore/emissions/index.md)
- [Relationships](https://www.materialinsights.org/commodities/iron_ore/links/index.md)