New Analysis from Global Industry Analysts Reveals Steady Growth for Iron Ore, with the Market to Reach 2.5 Billion Metric Tons Worldwide by 2026
SAN FRANCISCO, May 31, 2022
SAN FRANCISCO, May 31, 2022 /PRNewswire/ — A new market study published by Global Industry Analysts Inc., (GIA) the premier market research company, today released its report titled “Iron Ore – Global Market Trajectory & Analytics”. The report presents fresh perspectives on opportunities and challenges in a significantly transformed post COVID-19 marketplace.
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Edition: 17; Released: May 2022
Executive Pool: 3243
Companies: 123 – Players covered include Anglo American Plc; ArcelorMittal S.A.; BHP Billiton Group; ; Cleveland-Cliffs Inc.; Ferrexpo plc; Fortescue Metals Group Ltd.; Hainan Mining Co., Ltd.; Hancock Prospecting Pty Ltd; Luossavaara-Kiirunavaara AB; Mechel PAO; Metalloinvest MC LLC; Rio Tinto Group; United States Steel Corporation; Vale S.A. and Others.
Coverage: All major geographies and key segments
Segments: Product Type (Fines, HBI/DRI, Pellets, Lumps)
Geographies: World; USA; Canada; Japan; China; Europe; France; Germany; Italy; UK; Spain; Russia; Turkey; Ukraine; Rest of Europe; Asia-Pacific; India; South Korea; Taiwan; Rest of Asia-Pacific; Latin America; Argentina; Brazil; Mexico; Rest of Latin America; Middle East; Africa.
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Amid the COVID-19 crisis, the global market for Iron Ore estimated at 2.2 Billion Metric Tons in the year 2022, is projected to reach a revised size of 2.5 Billion Metric Tons by 2026, growing at a CAGR of 3.2% over the analysis. Fines, one of the segments analyzed in the report, is projected to grow at a 3.4% CAGR, while growth in the Hbi/dri segment is readjusted to a revised 2.9% CAGR. The steel industry has experienced faster-than-expected recovery from the impact of lockdowns and production disruptions amid the COVID-19 outbreak. The rebound can be attributed to the strong contribution from major end-use sectors like construction and automotive. In 2020, steel and therefore iron ore demand was adversely impacted by the interruptions in industrial production and the world construction industry. But in 2021, demand for iron and steel is expected to revive significantly, with resumption of industrial activity due to easing of lockdowns. In 2020, China contributed to 56.5% of the world production of crude steel. China and various other countries have introduced novel infrastructure programs for fostering economic growth. As steel, iron, and other metals are critical for these projects, the global iron ore price has spiked, with demand being more than supply. Therefore, the iron ore mining sector is expected to gain from this.
The iron ore mining industry is characterized by considerable volatility and is impacted by global demand, commodity prices, and business cycles. The extent of global industrialization, especially in China, India and in other emerging countries has given impetus to the demand for iron and steel, thus having an impact over global metal prices. In the last several years, there has been a rise in seaborne trade of iron ore. Typically, most leading iron ore producers engage in exporting to overseas markets. In the year 2021, over 62% of the world seaborne iron ore demand was from China (in volume terms), on account of its expanding steel production and increasing demand in several industries.
The world iron ore market is anticipated to witness modest growth due to the rising infrastructure investments, and the growing construction market in emerging regions such as Latin America and APAC. Rising demand for steel worldwide and the steady increase in infrastructure projects in countries such as Indonesia, India, and other such regions is also fueling iron ore growth. Supportive government policies such as less stringent import and export restrictions and financial support have also boded well for the market. Iron ores refer to minerals and rocks which are leveraged to extract metallic iron. Ores can contain high levels of magnetite or hematite or both. Alumina and silica are also present in iron ore. Iron ore deposits can be titanomagnetite ores, magnetite ores, or hematite ores.
The North American market is anticipated to register robust growth, driven by the rising steel demand in the automotive and construction industries. Further, the strict environment related policies have resulted in the growing use of iron ore pellets, as they are considered to be more eco-friendly in comparison to other kinds of iron ores. Technology adoption is significant in the regional market for improving operational efficiency while lowering costs. Latin America is the second leading iron ore market. The market is supported by the growing adoption in industries such as manufacturing and construction, especially in Brazil. The market in Europe is anticipated to register considerable growth mainly due to the growing investments in infrastructure projects in the region. The APAC market is also likely to record strong growth, attributed to the increasing economic growth of various countries in the region, growing population, and the improving disposable income levels. India, Korea, and China are the key markets in the region. The Middle East and Africa is anticipated to be the iron ore market with the fastest growth (note: pls check), thanks to growing use in industries such as manufacturing, automotive, and construction.
The world iron ore market is also gaining from the novel plants and growing production capacities in emerging regions such as China and India. India is the world’s 4th leading iron producer, and 67 million MT of iron ore production capacity was attained in 2021-2022. For this, iron ore producers are required to augment their production capacities. SAIL intends to increase its iron ore mines in the state of Jharkhand in the near term. JSW Steel aims to start work in the iron ore mine in Karnataka, with 4.7 million MT of yearly run rate. Further, the mines in China will be developed in stages, with 7 million MT capacity and 15 million MT capacity in the first and second phase. But the market is challenged by the considerable capital investment required for the heavy machinery and equipment needed for mining operations as well for the logistic infrastructure required for transportation. Further, regulations and duties enforced by governments on the mining sector, and shortage of skilled labor also pose challenges to the market. The presence of established domestic and international companies in the market is expected to hamper the entry of new players. Furthermore, the advent of the Coronavirus pandemic adversely impact growth of the iron ore market, due to declining demand, labor shortages, compulsory shutdown of operations on account of lockdowns, and piled-up inventory. The use of robotics is growing in the mining industry, as the technology offers time savings, reduces operational expenses, and keeps workers safe. Robotics is being leveraged for mining activities such as blasting, truck guidance in iron mines, and drilling, among others. Unmanned rock drilling rigs and trucks are also increasingly being used as they can operate around the clock and therefore considerably increase production capacity.
In 2022, prices of iron ore are expected to rise due to recovery in demand. During the previous year, prices were on a downward trend, after reaching $220.1 per ton. Demand for iron ore is expected to continue to grow, supported by the stimulus package allocated for the infrastructure industry, given the decelerating economic growth. There is not likely to be a considerable rise in the supply of iron ore from leading producers. There also exist significant supply risks on account of weather conditions and potential interruptions in operations due to COVID-19. Supply limits from mining companies and demand from China are considered to be the factors behind the expected price rise, resulting in the yearly average iron ore price for the years 2022 and 2023 to be over the levels registered before COVID. In 2022, China is expected to give a boost to its economy, financially, given the sluggish economic growth scenario due to the dull real estate market and the stringent Coronavirus-related lockdowns. The market is also expected to be impacted by the potential government efforts that aim to improve the self-sufficiency of China in ferrous units. The steel industry’s consumption of iron ore is likely to gain momentum, subsequent to low steel production in 2021 due to power shortages. There are improvements in production in Australia and Brazil. There is a likelihood of novel supply emerging from West Africa. More
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