Bulk mineral prices are set mainly by negotiation between buyer and seller, not on an exchange. They depend on the grade and processing, the volume and contract type, the moisture and quality terms, and above all the cost of freight.
For low-value minerals such as salt, bentonite or limestone, freight can be a large part of the delivered cost. That is why two quotes from the same region can look very different once you add the voyage.
What drives the ex-works price
- Grade and processing matter most, because crude lumps cost less than dried, activated, ground or granulated material.
- Specification limits matter, because tighter purity, swelling or brightness limits mean more selection and waste at the mine.
- Volume and duration matter, because a term contract for steady volumes usually earns better terms than a single spot cargo.
- Season matters, because the monsoon stops or slows salt making and open-pit mining for several months.
- Fuel and power affect drying, activation and grinding costs.
- State royalties and levies on minerals form part of the producer's cost.
Why freight dominates
Bulk freight rates move with the dry bulk market, fuel prices, vessel availability and route risk. A longer voyage, a smaller vessel or a port with slow discharge all push the delivered cost up. Container freight for bagged cargo moves with its own market.
The Incoterm decides who carries that risk. FOB leaves freight with you, while CFR and CIF put it with the seller, who will price in a margin for it. Read FOB, CIF or DAP to choose. Our article on bulk mineral freight options compares vessels and containers.
Quality terms change the real price
The headline figure is only part of the deal. Two offers at the same figure can differ in what you actually receive. Check these terms side by side:
- The moisture basis, because a price per wet tonne buys less mineral than a price per dry tonne.
- Penalty and rejection clauses for moisture, purity or other limits.
- Who appoints and pays the independent surveyor at loading.
- Quantity tolerance, usually a percentage above or below the contract tonnage at the seller's or vessel's option.
- Laytime and demurrage terms at both ports.
How to get a fair comparison
Compare offers on the same grade, test method, moisture basis, Incoterm and port. Ask each supplier to quote on your specification, not their standard grade. Our guide to comparing chemical quotes sets out a method that works for minerals too. Also ask how long each quote is valid. Mineral offers often carry a short validity because freight and fuel move quickly, and an expired offer is only a guide.
Next step
A real price comes from a quote on your specification, volume and port. We help you build that request and compare the replies. To start, book a free sourcing review.