Commodity Market Report
Global Iron Ore Strategic Planning Outlook – Q1 2023
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The reopening of the Chinese economy after three years of strict Covid-19 restrictions contributed to rising iron ore prices so far in 2023, in an environment of relatively low supply. However, global iron ore demand growth of only 1% in 2023 will contribute to prices fizzling out in the second half of the year. Our view is for the 62% Fe fines CFR China price to average US$115/t in 2023. No change to our view that prices will trend lower over the next five years in anticipation of easing supply constraints and moderation in Chinese demand. We have lowered our long term price to US$73/t CFR (real 2023 terms) versus our previous forecast of US$80/t. The catalyst being the inclusion of Simandou in our base case forecast. Several risks remain that are intrinsic to projects of this size, but the eventual additional supply from Simandou will negatively impact the long term iron ore price. This report presents our current assessment of iron ore market dynamics and long term price outlook.
Table of contents
-
What’s changed since Q4 2022?
- Overview
- Demand view
- Supply view
- Price view
-
The five-year view - what’s changed?
- Seaborne Trade
- Price Forecast
- Simplified market balance and cost support
- Price versus costs
- Premiums and discounts
- Price outlook for lump
- Price outlook for pellets
-
The long term outlook (post-2026)
- Forecasting rationale
- Long term price forecast lowered to US$73/t CFR (previously US$80/t)
- Key swing factors that could impact the long-term view:
- Overview
- Asia
-
China
- Steel production in China to edge up in 2023
- EAF share continues to grow for decarbonisation in the medium term
- H-DRI will ramp up in the long term but BF-BOF to remain dominant
- Iron ore imports to decline while import dependency rises
-
India
- Indian iron ore demand to grow by 6% in 2023, led by strong hot metal production
- Indian steel capacity to boom in the next decade; BOF to remain dominant
- 25 more item(s)...
Tables and charts
This report includes the following images and tables:
- Tier 3 and Chinese domestic supply requirement
- ViU adjusted 2030 Cost curve
- Price and cash cost, by percentile contestable market, CFR China)
- Premium and discount for high/low grade iron ore (US$/t and %)
- Iron ore lump premium
- Blast furnace pellet premium
- Overview of global steel and iron ore market
- China key demand data
- JKT demand dynamics
- Korean iron ore demand to overtake Japans'
- S.E.Asia Iron ore consumption
- Indonesia to gain share in S.E.Asia
- 34 more item(s)...
What's included
This report contains:
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