Commodity market report

Global iron ore long-term outlook Q1 2017

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Report summary

The Global Iron Ore Market Long term Outlook provides detailed supply and demand analysis and price forecasts for the iron ore market to 2035. Having averaged $86/t in Q1 our CY17 forecast of $68/t CFR implies an average price of $62/t for the rest of the year. Our view is that the disconnect between iron ore prices and costs is unsustainable and the inevitable margin compression is more likely to come from falling prices than rising costs. We think 2018 will mark the low point of the iron ore cycle with prices averaging $52/t in real terms. Prices need to fall to the low $50/t range and remain there for several months to force out excess high cost supply. From 2019/20 a gradual price recovery is expected as a more concentrated industry structure leads to enhanced pricing power and positive "cost push". Incentive price analysis indicates long run price support around $60/t CFR (real 2017 terms) effective from 2025.

What's included

This report contains

  • Document

    Iron ore LT Datafile Q1 2017.xls

    XLS 916.50 KB

  • Document

    Global iron ore long-term outlook Q1 2017

    PDF 694.80 KB

  • Document

    Global iron ore long-term outlook Q1 2017

    ZIP 995.60 KB

  • Document

    Executive summary

    PDF 86.16 KB

  • Document

    Demand

    PDF 213.44 KB

  • Document

    Supply

    PDF 267.97 KB

  • Document

    Supply-demand balances

    PDF 242.34 KB

Table of contents

  • Executive summary
  • Demand
  • Supply
  • Supply-demand balances

Tables and charts

This report includes 43 images and tables including:

Images

  • Global consumption of iron ore by product
  • Growth in iron ore consumption and imports
  • Historical and forecast hot metal production has been revised upwards - accordingly, iron ore demand has been revised up
  • Demand: Image 4
  • Iron ore price forecast: sinter fines, FOB Australia
  • Iron ore price forecast: sinter fines, CFR China
  • Iron ore price and price differentials
  • Relationship between coking coal price and iron ore price spread
  • Iron ore price vs cost of production
  • CFR China cost vs iron ore price
  • Iron ore breakeven curve: 2017
  • Iron ore breakeven curve: 2019
  • Iron ore exports by country
  • Iron ore exports by company
  • Iron ore exports: Brazil vs. Australia
  • Share of global exports: Brazil vs. Australia
  • Supply-demand balances: Image 9
  • Indian production of iron ore
  • Indian trade in iron ore
  • Although total iron ore output will continue to decline, domestic miners will gain back some market share after 2025
  • In the short term, pellet production will decline at a slower pace than sinter production
  • Iron ore pellet premia
  • Iron ore consumption: China and India
  • Global seaborne trade in iron ore
  • Trade balance as % of total imports
  • Iron ore trade balance and price forecast
  • long run supply "gap" analysis
  • Incentive price analysis – selected (non-base case) projects only

Tables

  • Executive summary: Table 1
  • Demand: Table 1
  • China: iron ore consumption, imports and supply
  • Asia (ex-China): key demand forecast data
  • Demand: Table 4
  • Demand: Table 5
  • Demand: Table 6
  • Demand: Table 7
  • Demand: Table 8
  • Supply: Table 1
  • Iron ore production and exports by major country
  • Iron ore exports by key company
  • Asian exports of iron ore by country (Mt)
  • Iron ore reserves in China
  • Incentive price analysis – selected projects

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