Global Iron Ore Strategic Planning Outlook – Q1 2023
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.