Engineering & Mining Journal

NOV 2017

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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Page 38 of 83

IRON ORE REPORT NOVEMBER 2017 • E&MJ 37 pared to the same period last year. This points toward industry growth. China alone accounts for half of the crude steel production globally, which has grown by 6.3% in the fi rst nine months of 2017 compared to the same period 2016. The World Steel Association's Short Range Outlook October 2017 for world steel use, anticipates an increase in world steel demand by 2.8% in 2017, followed by an increase of 1.6% in 2018. China's steel demand is expected to increase in 2017 by 3% and be fl at in 2018. Howev- er, this represents a turnaround from the April 2017 predictions of steel consump- tion in China for 2017 at zero growth and for 2018 a contraction of 2%. The growth in world steel production came to a halt in 2015. Even if 2016 showed some growth the fast growth pe- riod 2000-2010 seems to be over. The decisive factor for steel market prospects are the direction of economic change in China. It is not the slowdown in Chinese growth per se that would lead the slow- er steel demand growth over the longer term, but rather the reduced share of in- vestment in Chinese GDP. With lower steel growth, the scrap ratio of the steel burden will also increase as more and more steel becomes available for recycling. This will limit the demand growth for virgin units of iron ore. Thus, pig iron production can arguably give a more accurate picture of the demand for iron ore than crude steel. In 2016, pig iron production increased by 0.1% or 1.1 mil- lion mt. That would generate an additional demand of roughly 1.8 million mt iron ore in China. However, global iron ore produc- tion increased by 80 million mt in 2016. Clearly more iron ore is produced than what is demanded, but paradoxically iron ore prices increased during the year. This can, as discussed above, at least partly be explained by the increasing price premium for high-quality iron ores and an increasing spread between the various qualities. With the completion and ramp-up of Vale's S11D and the independent Roy Hill mine, iron ore capacity will probably in- crease more than demand also in the next couple of years. However, Vale has fl agged that capacities might not be taken into use if the market cannot support more materi- al. But this will all the same probably re- sult in a weaker 62% Fe iron ore price in 2018, if the other major producers do not follow suit and also lower their production. The spread of prices between the low, medium and high-quality iron ores are ex- pected to remain wide. There seems to be a glut of low-quality ores and a defi cit of high-quality iron ore products. If this situ- ation continues, a reduction of production by certain low-quality miners might take place while other producers of high-quali- ty ores might increase their production. Anton Löf is an independent consult- ant based in Stockholm, Sweden. Mag- nus Ericsson is consulting professor at Luleå University of Technology, Sweden. For further details, contact Anton Löf at UNCTAD's Iron Ore Market 2017 is now available. For more information, contact: At GIW, our focus is on supporting you through the entire life cycle of your slurry systems. This includes working together to optimize your up time to increase productivity. How do we do this? We offer an entire business model under one roof. From research and design to aftermarket services we are your one stop shop for slurry pumps, cyclones and parts. This includes dedicated foundries for casting, machining and assembly and an on-site test facility to ensure optimal product performance. As the OEM, we offer services that others try to provide but can only copy. Whether you need mill discharge or cyclone feed pumps, new materials for your wear parts, or to upgrade your current slurry equipment to match your ever changing processing requirements, we have the answer. From concept to installation & beyond, your success is our priority GIW Industries, Inc. (A KSB Company) · R e s e a r c h & D e s i g n C o m m i s s i o n i n g S e r v i c e & R e p a i r O n - g o i n g S u p p o r t M a n u f a c t u r i n g E n g i n e e r i n g S t a r t u p T e s t i n g F u l l - s c a l e

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