Industry Notes / Mining: copper over iron / Chapter 6 of 8 · Thesis cards
Iron ore is the defensive asset
Cash cow and valuation anchor—not AI torque
The surplus is still growing
About 70 Mt of new seaborne capacity arrives in 2026, led by Simandou.
A downward supply story, not a shortage story.
Demand is capped by China steel
Daily hot-metal remains relatively high and floors spot prices; a plateau is not a return to growth.
AI steel need is noise versus ~1.9 bn t of crude steel.
Limited upside: grade differentials
EU CBAM is already charging; seaborne benchmarks slipped to 61% Fe while green steel wants ≥65%. High–low grade spreads are widening structurally.
That is the iron alpha still worth tracking—not a bulk shortage.
What it means for portfolios
Iron ore still funds copper growth capex with cash-cow margins around the low-60% EBITDA zone for majors.
Without copper exposure, names like Fortescue are priced more on forward EPS cuts.
The surplus is still widening and Simandou presses the cost curve. Majors fund copper growth with iron-ore cash—iron exposure is more yield, copper exposure is growth.
Source：SMM 铁矿供需模型；Simandou 爬坡公开数据；中国粗钢与地产用钢公开统计
Research notes, not investment advice.