Engineering & Mining Journal

OCT 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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IRON ORE OUTLOOK OCTOBER 2018 • E&MJ 49 million mt was sold to other EU countries. Other major exporting countries are Ja- pan, 37.5 million mt, South Korea, 31.4 million mt, and Russia, 31.1 million mt. Global steel demand recovery during 2016 and 2017 has supported a rebound in steel prices from their lows in 2015 and early 2016. The world steel price index rose sharply in 2016 and has continued to in- crease during 2017. Prices for the key steel- making raw materials (iron ore, hard coking coal and scrap) have started to recover. The margin between raw materials costs and steel prices increased between 2013 and the second half of 2016 when, because of the sharp increase in the price of hard coking coal, the margins dropped sharply. Since then, margins have stabilized. Iron Ore Production Global output of iron ore increased by a modest 2.7% to 2.187 billion mt in 2017. The increase is mainly due to higher out- put in Australia, particularly the ramp up of the Roy Hill mine. Australia continues to grow faster than Brazil. In 2017, the former grew by 3% to 883 million mt, and the latter by 0.3% to 436 million mt. Asian production, which reached a peak in 2007 at 647 million mt, has come down considerably since, mainly due to shrink- ing output in China and India. However, since 2016, Chinese output has bottomed out around 115 million mt. The national Chinese production figures for unbenefi- ciated ores increased by 1.9% to 1.322 billion mt in 2017. In India, the downward trend has turned, with an increase in pro- duction since 2014. In 2017, production grew to 202 million mt, a 9.4% increase. In Europe, including Russia and Ka- zakhstan, production declined by 1.5% in 2017, down to 232 million mt. African production fell by 5.4% to 85.7 million mt in 2017, and output by the two ma- jor producing countries, South Africa and Mauritania, declined, the former by 6.3% and the latter by 12%. During the last decade, with the ex- ceptional increase in production from Australia and the falling production in China, the share of iron ore being pro- duced by developing countries has de- clined from top levels at 76% in 2007 to around 50% in 2017. For the first half of 2018, 13 major companies, which reported quarterly figures produced 711 million mt. This represents a growth of 1.4% year-on-year. Rio Tinto shows the largest increase so far this year with a production growth of 9.5% or 15 mil- lion mt compared to the same period the previous year. Iron Ore Trade Global exports increase by 3.3% in 2017. World total iron ore exports have more than doubled since 2006 and amounted to 1.568 billion mt in 2017, compared to 1.518 billion mt in 2016. Australia is by far the largest exporter of iron ore with a market share of 53%. During 2017, Australia's exports continued to increase, reaching 828 million mt, an increase of Through the first half of 2018, total iron ore production is up 1.4%. Regions and major producing countries 2015 2016 2017 Canada 00,46.0 00,46.7 00,49.0 USA 00,46.1 00,41.8 00,47.6 Brazil 0,416.5 0,434.0 0,435.5 Mexico 00,20.4 00,19.1 00,17.2 Subtotal Americas 0,560.6 0,573.4 0,579.4 Sweden 00,24.6 00,26.9 00,27.2 CIS 0,202.0 0,202.0 0,198.2 Subtotal, Europe 0,235.2 0,235.7 0,232.1 Mauretania 00,11.6 00,13.3 00,11.7 South Africa 00,72.8 00,66.5 00,62.3 Subtotal, Africa 00,93.8 00,90.6 00,85.7 India 0,142.5 0,184.5 0,201.8 China 0,123.5 0,113.7 0,115.0 Subtotal, Asia 0,334.7 0,368.4 0,402.7 Australia 0,811.2 0,858.0 0,883.4 Subtotal, Oceania 0,814.4 0,861.5 0,887.4 World Total 2,038.7 2,129.7 2,187.4 *Chinese production adjusted to represent tonnage in which iron content is roughly equal to average content in the rest of the world. Chinese ore production (unadjusted): 1,592.4 1,381.3 1,280.0 Lower grade production in China decreases, while tonnages in Brazil and Australia increase. In general, China consumes most of the iron ore, which is supplied by Australia and Brazil. Figures are millions of mt/y.

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