Commodity Market Report

Global iron ore long-term outlook Q1 2020

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31 March 2020

Global iron ore long-term outlook Q1 2020

Report summary

Iron ore fared better than most industrial metals in the immediate aftermath of the coronavirus outbreak. But there is no escaping the devastating impact the pandemic will have on global steel markets and the inevitable flow through to iron ore. Our working assumption (based on a highly volatile situation) is for a more pronounced down-cycle for iron ore (than our pre-virus forecast), reaching its nadir in 2023. Read our latest global iron ore long term outlook for details on our base case view and key risks impacting seaborne iron ore supply, demand and price.

Table of contents

    • Price forecast:
    • Key demand revisions:
    • Key supply revisions:
  • Overview
    • China
    • Moderate crude steel production drop in 2020
    • Smaller drop in hot metal production and thus iron ore demand
    • Iron ore demand from 2020 onward
  • India
  • Japan
  • South Korea
  • Taiwan
  • Indonesia and Vietnam
  • Other Asia
  • Europe
  • EU and the UK
  • Turkey
  • CIS
  • Russia
  • Ukraine
  • North America
  • United States
  • Mexico
  • Canada
  • South America
  • Brazil
  • Other South American countries
  • Australia
  • Middle East and North Africa
  • Iran
  • Algeria
  • Egypt
  • Africa
  • South Africa
    • Key trends by product type
    • Sinter fines
    • Pellet feed
    • Lump
    • Pellet
    • Australia
    • Brazil
    • Chile
    • Peru
    • Venezuela
    • Canada
    • United States
    • Liberia
    • Mauritania
    • Sierra Leone
    • Congo
    • South Africa
    • Europe
    • Russia
    • Ukraine
    • China
    • India
    • Asia (excluding China and India)
    • Iran
    • Revised market balance and price outlook
    • Long term outlook (no change to price forecast, despite a more closely balanced market)
    • Fe grade price spreads (down then up)
    • Dry bulk freight outlook – uncertain times!
    • Key "swing factors" that could significantly impact the long-term view:
    • Price outlook for lump
    • Past trends in lump premia
    • Future trends in lump premia
    • Price outlook for pellets
    • Past trends in pellet premia
    • Future tends in pellet premia
    • Methodology
    • Long run trade balance
    • Long run incentive price
    • Australia
    • Brazil
    • China
    • India
    • Indian reserves and production
    • Key Indian producers
    • Indian policy framework
    • Africa
    • Canada
    • Russian Federation/Ukraine/Kazakhstan
    • Sweden
    • Chile
    • Peru

Tables and charts

This report includes 53 images and tables including:

  • Key demand forecast data
  • Japan is responsible for 5% of global iron ore consumption
  • and imports 10% of global fines supply
  • Indonesia: We expect the relatively rapid increase in iron ore consumption seen over the last five years to continue in the long-term
  • Vietnam: The rapid expansion in iron ore consumption seen over the past two years will begin to cool from the mid-2020s
  • Europe: key demand forecast data
  • EU28 is responsible for 8% of seaborne iron ore imports
  • but imports 32% of global pellet imports
  • Turkish blast furnace iron ore consumption has the potential to grow in the medium term as new hot metal producing assets are commissioned
  • Turkish domestic iron ore supply currently satisfies around one-third of domestic demand but as demand rises that share will fall to around one-quarter
  • Key demand forecast data
  • North America: key demand forecast data
  • Canadian iron ore consumption will fall in 2020 then gradually increase.
  • Canada produces pellets and is an exporter of pellet feed.
  • South America: key demand forecast data
  • Brazil is the dominant consumer of iron ore in South America, by some margin but is only responsible for 2% of global iron ore consumption and sources ore domestically
  • Venezuelan iron ore consumption has been all but eradicated by conflict and political instability. Our base case is for a recovery but there is downside risk to this view
  • Middle East and North Africa: key demand forecast data
  • The Middle East is not a major global iron ore consumer or importer
  • But is responsible for 16% of seaborne pellet feed imports and 11% of global pellet imports
  • The DRI sector is the main iron ore consumer in Iran and will increase its proportion of the total in the long-term
  • Domestic iron ore supply satifies most of Iranian demand. Export volumes will decline in the future
  • Algeria will import 100% of the pellet feed required to produce DR grade pellets...
  • ...and will be required to import pellet to top-up domestic pellet production to meet demand
  • DRI is the favoured technology in Egypt
  • Improved gas availability and lower gas prices will drive higher DRI output
  • Iron ore production and exports by major country
  • Iron ore exports by key company
  • Global seaborne trade
  • Price forecast
  • China key demand data
  • Forecast year-on-year change (2019-2020) - flow through from finished steel through to iron ore.
  • Forecast year-on-year change in iron ore supply and demand.
  • Long-term China iron ore forecast (Dry basis, 62% Fe equivalent)
  • Asia (ex-China): key demand forecast data
  • Cumulative % of mines production at different price levels
  • Contestable Private Production at different price levels (Wet tonnes)
  • India - iron ore production by company
  • Revised price forecast: Q1-2020
  • Price and cash cost, by percentile (contestable market, CFR China)
  • Iron ore price (historical perspective)
  • Premium and discount for high/low grade iron ore
  • Cost changes to key iron ore routes*
  • Dry bulk trade outlook
  • Iron ore lump premium
  • Blast furnace pellet premium
  • Iron ore trade balance
  • Imports - China down, India up!
  • Project incentive curve (basis 62% Fe fines, CFR China)
  • Incentive price analysis – selected projects
  • China - LTO mined iron ore supply
  • 2019 average metallics consumption and ferrous waste generation in China
  • Demand for iron ore

What's included

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    Global iron ore markets long-term outlook data 2020 Q1.xls

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    Global iron ore long-term outlook Q1 2020

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