Report Suggests Worldwide Iron Ore Production Will Keep Increasing Till 2025
The latest industry report by Fitch Solutions forecasts that the worldwide production of iron ore will grow in the coming years. The research firm forecasts that from 2021 to 2025, the worldwide iron ore mine output growth will average almost 4%. This is in comparison with the 2.3% forecast of the last five years.
According to the market analyst, this will increase the annual production of iron ore by more than 570 million tons by the year 2025, with the main countries driving this growth being Australia and Brazil. In its report, Fitch states that mining companies in Australia, such as Fortescue, Rio Tinto and BHP, plan to re-invest their booming profits into additional production. Futhermore, Vale, which has its headquarters in Brazil and is the second-largest mining company in the world, is working towards expansion.
Fitch notes that these moves will bring an end to the inactivity that has continued since the price of iron ore hit its lowest average of $55 per ton in 2015.
The firm’s forecasts shows that the production of iron ore in Australia in the period between 2021 and 2025 will grow at an average rate of 1.8% annually. The market analyst also expects the production of iron ore in China to increase during the same period, as the country works to decrease imports from Australia and grow its self-sufficiency. The forecast notes that by 2025, iron ore production will reach almost 1.1 billion tons, before declining once again.
In Brazil, the research company expects the production of iron ore to grow at an average rate of 10.6% annually. This will facilitate an increase from last year’s production of 397 million tons of iron ore to over 540 million tons of iron ore in 2025. Production growth in the country is set to decrease over the long term, with forecasts showing an average annual growth of less than 2% in the period between 2026 and 2030. This will bring yearly output to slightly above 590 million tons by 2030.
In other news, the price of iron ore rose again last week, driven by expectations of an increase in the demand for steel in China. Benchmark 62% Fe imported into China was being sold at almost $158 per ton, according to Fastmarkets MB. This is roughly a 1.3% increase in price, in comparison to the closing price days earlier.