This report is part of the S&P Global Energy Metals Trade Review series, where we dig through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium, nickel and steel and scrap. We also explore what the next few months could bring, from supply and demand shifts to new arbitrages and quality spread fluctuations.
The Asian iron ore market has seen prices of medium-grade fines diverge well into the first month of 2026, and could see that persist amid unofficial curbs on Chinese steelmakers’ buying of certain brands, trade sources and other market participants told Platts, part of S&P Global Energy.
The price relationships between the medium-grade brands had started to stabilize in their new positions against each other and the IODEX in Q3 2025, when Chinese steelmakers received their first deliveries of Pilbara region material of revised, lowered specifications.
Brands like Pilbara Blend Fines and Mining Area C Fines had traded near parity between July and September, but have now taken different paths, with the latter trading at increasingly large discounts on a floating price basis.
This followed decisions for Chinese mills to stop buying BHP’s Jimblebar Fines on Sept. 18, 2025, and then Jinbao Fines on Nov. 21. There was initial buyer uncertainty around whether imports of MACF and Newman High Grade Fines, BHP’s other brands, would also face barriers, as no formal announcement of the ban has been made.
While it has become clearer that MACF and NHGF don’t face hurdles, Chinese steelmakers have avoided buying them in the seaborne spot market directly from the miner, leaving traders as their main counterparties.
As a result, MACF traded at discounts of as much as $4.30/dmt to 61% Fe indices on Jan. 20, compared with a $1.35/dmt discount Nov. 24, 2025, when BHP first started offering spot cargoes on a 61% Fe basis, data compiled by Platts showed.
Similarly, NHGF traded at the widest discount of $5.30/dmt to 61% Fe indices on Jan. 20, compared with a discount of $1.05/dmt Nov. 24.
As term contractual negotiations with China Mineral Resources Group, the nation’s central buyer, became drawn out, the number of spot, seaborne transactions of MACF and NHGF rose 133% quarter over quarter in Q4 2025, exceeding that of Rio Tinto’s PBF, traditionally the brand that sees the highest seaborne liquidity.
However, with Chinese mills reliant on MACF and NHGF in their blast furnaces, they have continued buying both brands from third parties in the secondary market and at port stocks, market participants said.
The secondary seaborne trades have taken place more discreetly, and at smaller discounts — or higher prices — than the levels at which primary trades were done, market participants said.
Further, port stocks of MACF and NHGF have traded at parity with and higher than PBF since Jan. 5, according to Platts data, indicating that the two brands maintained their intrinsic values, and that the larger discounts seen in primary seaborne trades were in large part an artifact of outstanding negotiations and the import barriers.
Steelmakers turning toward securing iron ore from port stocks amid uncertainty over import curbs has led to the Platts IOPEX — a measure of port stock iron ore prices — to exceed the IODEX at a spread of $3.90/dmt on Jan. 16, the largest since June 2024.
Pilbara Blend Fines as safe haven
With three out of the five main medium-grade fines trading under duress, buyers’ flight to safety saw demand shift to PBF, the most similar alternative.
Premiums for both brands on a floating price basis each rose by $0.30/dmt day over day against the front-month derivative on Oct. 13, after the market returned from a week-long holiday in China, with that for PBF hitting a high of $1.20/dmt on Jan. 23.
Supply of February-arrival cargoes from Rio Tinto was tight, as it sold only four spot PBF cargoes in December for January loading, before shifting early January to selling March-arrival cargoes, Platts data showed.
While the iron ore market typically values PBF as a brand at parity to the IODEX after normalization for quality and timing, its recent scarcity, combined with steelmakers’ restraint in buying MACF and NHGF cargoes in the seaborne spot market, reshaped price relationships beyond what differences in the chemical properties of each brand could account for.
Other than adjusting for differences in chemical properties and timing to the IODEX basis specifications, Platts also normalizes for price differences that the market accrues to a brand’s physical and metallurgical properties, consistency of quality, and other market-driven factors.
This is done by applying an additional brand spread, which, when added to the price difference arising from a brand’s alumina, silica, and phosphorus contents being higher or lower than the IODEX basis specifications, makes up its total value in use.
Platts adjusted additional brand spreads for MACF and NHGF higher to account for limited seaborne buying interest, due to the trade curbs, in line with the widened discounts of the two brands on a floating basis.
Reflecting the spot market’s valuation of PBF at a premium relative to other medium-grade fines after quality adjustments and the IODEX, Platts applied a negative additional brand spread of minus 60 cents/dmt to PBF Jan. 9 and widened it to minus 95 cents/dmt Jan. 23, on buyers’ flight to safety, coupled with spot supply scarcity from Rio Tinto.
In January, PBF traded at a premium of $1.15/dmt to the March IODEX at its highest in the primary market.
PBF last recorded a negative additional brand spread between June 12 and Aug. 15, 2023, at minus $0.25-$1.05/dmt, driven by a scarcity of spot supply.
Seaborne lump prices hit 4-year low
Spot prices of seaborne lump sank in Q4 to the lowest since September 2021, reaching 3.5 cents/dmtu on Dec. 29 as dwindling mill margins and ballooning inventories at Chinese ports suppressed import demand, leading mills to switch to buying cheaper portside lump.
The seaborne lump premium in Q4 averaged 43% lower than Q3 and was down 25% year over year, shrugging off the winter seasonal boost in demand that arises from sintering restrictions.
Following Platts’ update of the basis specifications of its lump premium assessment Jan. 2, to be over an IODEX fines strip that is 61% Fe from 62% Fe in 2025, the outright price of lump has remained rangebound at $107.55-$113.65/dmt CFR China.
Cost-effectiveness also continues to weigh on mills’ procurement decisions, resulting in demand shifts in the lump market toward lower iron content, non-mainstream lump, although the overall number of trades concluded for both mainstream and non-mainstream lump fell by 44% from 73 trades in Q3 to 41 in Q4, and 29% from 28 to 20 trades, respectively, Platts data showed.
With inventories at Chinese ports still high and the seaborne market seeing steady supply, market participants said they didn’t see strong prospects in the short term for a rebound in lump premiums.
Still, some have started to take positions with a view that lump premiums have bottomed out, supported by renewed market expectations of a recovery in steel demand in Q1. The physical lump premium has shifted to a contango, with cargoes arriving later in March trading at higher prices than those arriving at Chinese ports in January and February.
Source: Platts
