Iron ore bloodletting begins

Friday 11 September 2026

The great Simandou cost-curve shakeout has begun, and it is colliding with the Iran War shock, so it will likely get much worse before it improves.

The latest C5 shipping cost for Pilbara Capesize is still $18-19. This puts FOB iron ore spot prices at around $87-88, the lowest in four years.

But this time it’s more structural, as Chinese steel demand grinds inexorably lower and Simandou grinds steadily higher.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.