While China's steel mills are enjoying lower iron ore prices, the downside for China is that high-cost domestic miners are struggling
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MineLife
While China's steel mills are enjoying lower iron ore prices, the downside for China is that high-cost domestic miners are struggling. This year's sharp drop in iron ore prices to below $90 a tonne overnight could force China to close up to 80 million tonnes of domestic mine production, more than a fifth of its total annual output, according to consultancy Wood Mackenzie. China's domestic iron ore producers typically struggle when prices fall below $100 a tonne. China's domestic industry is highly fragmented, with producers in coastal areas believed to be facing some of the highest costs in the country - well above the price of imported ore. BHP, RIO and Vale are insulated to a significant degree as they are the world's lowest-cost producers.
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![Gavin Wendt](https://assets.livewiremarkets.com/rails/active_storage/representations/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBVZz09IiwiZXhwIjpudWxsLCJwdXIiOiJibG9iX2lkIn19--164b5589f632bf75e84060e9f39ace9be52c33a0/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaDdCem9MWm05eWJXRjBTU0lJYW5CbkJqb0dSVlE2RTNKbGMybDZaVjkwYjE5bWFXeHNXd2RwQWNocEFjZz0iLCJleHAiOm51bGwsInB1ciI6InZhcmlhdGlvbiJ9fQ==--d4026b52d9aa7a676b3d70dbe31c85d930184392/08.jpg)
Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).
Expertise
![Gavin Wendt](https://assets.livewiremarkets.com/rails/active_storage/representations/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBVZz09IiwiZXhwIjpudWxsLCJwdXIiOiJibG9iX2lkIn19--164b5589f632bf75e84060e9f39ace9be52c33a0/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaDdCem9MWm05eWJXRjBTU0lJYW5CbkJqb0dSVlE2RTNKbGMybDZaVjkwYjE5bWFXeHNXd2RwQWNocEFjZz0iLCJleHAiOm51bGwsInB1ciI6InZhcmlhdGlvbiJ9fQ==--d4026b52d9aa7a676b3d70dbe31c85d930184392/08.jpg)
Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).