Business
Why High-Grade Iron Ore is Poised to Rise and How to Invest
Redondo Beach, California--(Newsfile Corp. - November 6, 2018) - SECFilings.com, a leading fin...
About this update from Black Iron Inc.
[{"type":"text","content":"Why High-Grade Iron Ore is Poised to Rise and How to InvestRedondo Beach, California--(Newsfile Corp. - November 6, 2018) - SECFilings.com, a leading financial news and information portal offering free real time public company filing alerts, announces the publication of an article covering what's driving iron-ore prices and why investors may want to diversify into development-stage opportunities, like Black Iron Inc. (TSX: BKI) (OTC Pink: BKIRF) (FSE: BIN).Benchmark iron ore prices have risen from less than $66.00 per ton in early September to more than $75.00 per ton in recent weeks, driven by a 4.7% increase in global steel production during the first nine months of 2018 compared to last year. In addition, China could introduce a new stimulus package to combat rising trade tensions with the United States and bolster its domestic economy-a move that would surely increase demand for steel.On the other hand, China has been cracking down on steelmaker emissions as they're a primary contributor to pollution. Steelmaking provinces, like Hebei, have issued \"orange\" smog alerts in recent weeks that have forced steel mills to halve their output to improve air quality. The government has also started limiting steel production and encouraging steel mills to favor recycling over raw material to reduce pollution.Why Grades MattersMany iron-ore producers are concerned over these trends, but some companies have seen their revenue soar. For example, Vale SA has seen its share prices rise 53% over the past 52 weeks compared to a roughly-even year for BHP Billiton plc. The difference between Vale and many of its competitors is that the company is a leading producer of high-grade iron ore, which has captured much higher premiums.The gap between benchmark and high-grade iron ore has increased threefold over the past two years and is poised to continue to rise amid the environmental crackdown in China. Benchmark 62% iron-ore trades at around $73.64 per ton, compared to $98.05 for high-grade 65% iron-ore-a $24.41 or 33% premium. Investors may want to consider investing in producers of high-grade iron ore to capture greater profit margins.In addition to these higher margins, high-grade iron ore producers have seen stronger revenue. Vale recently announced record iron ore production during the third quarter at a time when many other benchmark produ...