Commodity Market Report
Iron ore markets - long-term outlook - Q1 2021
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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
Good times continue for iron ore miners, with global average cash margins estimated at 75%. This is higher than the industry achieved during the last great iron ore boom of 2010-2013 and is being supported by China's insatiable demand for steel and constraints on seaborne supply. Forecast revisions with this quarterly update result in a tighter seaborne market than previously expected. We now believe the positive flow through from 2020 could last for several years as the supply side struggles to catch up with buoyant demand. We have raised our medium term price forecast by approximately 25% and our longer term forecast by 6-8%. The long run (mid-cycle) price forecast for 62% Fe sinter fines is now $70/t CFR (real terms); consistent with long run marginal costs and project incentive price analysis. In this report and downloadable content, we provide an update on how the latest market developments will shape the long-term outlook for iron ore.
Table of contents
- What’s changed since Q4-2020?
- Price forecast revisions
- Key risks to our base case view:
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The five-year view - what’s changed?
- Seaborne Trade
- Price Forecast
- Simplified market balance and implied clearing price:
- Price versus costs
- Premiums and discounts
- Price outlook for lump
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Price outlook for pellets
- Past trends in pellet premia
- Future tends in pellet premia
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The Long-Term Outlook (post-2025)
- Forecasting rationale
- What’s changed?
- Incentive price analysis
- Key swing factors that could impact the long-term view:
- Overview
- Asia
- 29 more item(s)...
Tables and charts
This report includes the following images and tables:
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Price forecast revisions (2015-2025)Price forecast revisions (2000-2025)Base case: tier 3 requirement
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High case: tier 3 requirementBase case: implied priceHigh case: implied pricePrice and cash cost, by percentile contestable market, CFR China)Premium and discount for high/low grade iron ore (%)Premium and discount for high/low grade iron ore (US$/t)Iron ore lump premiumKey demand forecast dataChina key demand data
- 49 more item(s)...
What's included
This report contains:
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