Champion Iron’s second quarter of fiscal 2027, covering July to September 2026, pairs a volume record with a margin loss. Consolidated sales reached 4,494,100 dry metric tonnes, a quarterly record, up 34.6 percent quarter on quarter and 16.7 percent year on year, on revenue of C$403.9 million. The net average realized selling price fell to C$89.9 a dry metric tonne, from C$106.9 in the previous quarter and C$128.0 a year earlier.
Costs did not fall as fast as price. All in sustaining costs were C$97.9 a tonne, down from C$111.3 in the first quarter but above the realized price, leaving a cash operating margin of minus C$8.0 a tonne, negative for a second consecutive quarter after minus C$4.4 in the first quarter. A year earlier the same margin was plus C$31.1 a tonne. The swing, roughly C$39 a tonne year on year, is the iron ore price decline passing straight through a fixed cost base.
Operations explain part of the volume and part of the cost. Consolidated output was 3.87 million wet metric tonnes. Excluding the Rana Gruber operation in Norway, consolidated from April, Bloom Lake in Quebec produced 3.32 million wet metric tonnes, down 6.4 percent year on year and its lowest in five quarters, which the company attributed to inefficiencies from commissioning the Direct Reduction Pellet Feed project, in line with its expectations for the commissioning period. Sales recovered shipments delayed by that commissioning in the prior quarter, and the DRPF project shipped its first commercial cargo during the quarter.
The strategic question is timing. Champion is spending through a commissioning that depresses Bloom Lake output and lifts unit costs at exactly the moment benchmark prices test the high cost end of the supply curve, with the Singapore contract at two year lows this week and the World Bank expecting iron ore to average $98 a tonne this year and $95 in 2027. If DRPF delivers the higher grade, direct reduction quality product it is built for, the premium on that product is the route back to a positive margin without needing the benchmark to recover.