RE: Trump tariff effect on magnetite price31 Mar 2025 17:38
To determine the price of magnetite ore per tonne sold by Southern Minerals Group (SMG) in New Mexico and how it compares to market rates for similar ore produced in the USA as of March 31, 2025, we need to rely on available data and reasonable inference, as exact current pricing from SMG is not publicly disclosed in real-time detail.
Southern Minerals Group, based in Hanover, New Mexico, operates the Cobre magnetite stockpile, selling magnetite primarily to domestic U.S. markets such as cement, fertilizer, dense media, paint pigment, and coal cleaning industries. According to Strategic Minerals PLC, SMG's parent company, the price of magnetite sold to these markets is not directly linked to global iron ore prices, which are typically tied to steelmaking. Instead, SMG’s pricing reflects niche industrial applications and domestic logistics, including mine-gate sales and transportation costs. In 2024, Strategic Minerals reported expected full-year sales at Cobre exceeding $4.5 million, with a new purchase order for 2025 of up to 30,000 tonnes from a major client. Assuming sales reach $4.5 million for, say, 40,000 tonnes (based on historical sales volumes like 36,281 tonnes in 2022), this suggests an approximate price of $112.50 per tonne. However, with the 2025 order capped at 30,000 tonnes, if we conservatively estimate $4.5 million for that volume, the price could be around $150 per tonne. This is a rough estimate, as actual sales volumes and contract terms vary.
For comparison, U.S. market rates for magnetite ore depend on its grade, processing, and intended use. The USGS reports that U.S. metal mine production, including iron ore, was valued at $33.5 billion in 2024, with iron ore contributing 16% ($5.28 billion). The U.S. produced about 46 million tonnes of iron ore in 2022, mostly from Minnesota and Michigan, suggesting an average value of around $114 per tonne for crude ore (adjusted slightly for 2025). However, magnetite for steelmaking, like that from taconite deposits, often requires beneficiation to achieve higher iron content (60-70% Fe), increasing costs. Globally, magnetite iron ore prices align with the 62% Fe benchmark, which, per Trading Economics, was $102.32 per tonne (CFR China) as of March 30, 2025, down 1.14% year-to-date. U.S. domestic prices for processed magnetite might range from $100–$150 per tonne, depending on transportation and processing, though niche applications can command premiums.
SMG’s magnetite, processed to a fine P80 of 90 microns and sold domestically, likely fetches a higher price than crude iron ore due to its ready-to-use form and specialized markets. At an estimated $112–$150 per tonne, SMG’s price appears competitive or slightly above the U.S. average for crude ore ($114/tonne) but aligns with or falls below rates for processed magnetite, especially considering freight savings (e.g., LTL shipping from New Mexico to nearby U.S. clients versus imports). Unlike global steel-grade magnetite, SM
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