Global Diversified Metals & Mining: Iron ore producer break evens are rising, with cost support emerging at $85/t

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Global Diversified Metals & Mining: Iron ore producer break evens are rising, with cost support emerging at $85/t

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03 Aug 2026 01:00:00 ET │ 34 pages

Global Diversified Metals & Mining

Iron ore producer breakevens are rising, with cost support emerging at

$85/t

Equities

CITI'S TAKE

Ephrem Ravi AC

This report updates our proprietary 2026 iron ore cost curve, based on a +44-20-7986-2462

modelled universe that represents ~84% of expected global seaborne iron ephrem.ravi@citi.comore supply in 2026. The cost curve points to an industry effective cost

ACsupport of around $85/t, and at this price level ~100Mtpa or 6% of seaborne Alexander Hacking, CFA

supply, would be uneconomical. We believe non-mainstream supply, and +1-212-816-6232

high-cost producers would face increased pressure in the $85-$95/t range. alex.hacking@citi.com

In our view, iron ore equities are pricing in an average $93/t. Our cost curve

analysis provides bottom-up support for identifying potential price troughs Thiago Ojea AC

and periods when equity valuations imply iron ore prices below cost-curve- +61-2-8225-2404

supported levels. thiago.ojea@citi.com

Krishan M Agarwal ACEquity View: Our proprietary IO cost curve suggests the average all-in breakeven

price for the modelled universe has risen ~7% to $66/t. Breakeven prices for +44-020-7986-4092

producers in the model range from $55/t to $95/t, with the gap between highest krishan.agarwal@citi.com

and lowest breakeven price at $40/t. — FOB costs (adjusted for inflation) have AC Gabriel Barraincreased by an average 2% versus last year. However, elevated freight rates and

stronger producer currencies have pushed producer breakeven prices higher. +55-11-4009-2223

gabriel.barra@citi.com