Iron ore corporate activity 2020

The number of disclosed deals, both pending and complete, has fallen from 24 to 20, between 2019 and 2020. However, while only six transactions finalised in 2020, compared to 15 last year, there are 14 newly announced deals, compared with nine last year. This reflects a greater level of confidence in the sector, driven by higher iron ore prices and strong margins. With iron ore prices at sky high levels, supply remaining tighter for longer, and China steel demand showing little sign of slowing in the immediate future, we expected the level of corporate activity would have increased more than the numbers are suggesting. This is most likely an indication of a level of caution in the investment community due to COVID-19 which has severely impacted global economies. However, as economic activity rebounds, and with iron ore prices currently above US$150/tonne, 2021 is poised to be a bumper year for iron ore mergers and acquisitions.