U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T

The Iron Ore Market 2017

UNCTAD Trust Fund Project in Iron Ore Information
Last year saw a marked improvement for the iron ore industry after the slower growth, lower
ore prices and squeezed profit margins suffered in 2015. Although Chinese consumption
remained relatively low, and prices did not improve for much of 2016, the market started to
improve late in the year, with prices exceeding US$80/dmt CFR China in December 2016.

THE IRON ORE MARKET REPORT

IRON ORE MARKET 2016 l Steel Production
Lackluster global industrial production in 2016 left
DEMAND & the output of crude steel up less than 1% over 2015,
SUPPLY according to the World Steel Association, reaching
1,630 Mt. Exports of iron ore edged higher, with
SEABORNE much of the increase due to larger tonnages shipped
TRADE to China, which imported over 1,000 Mt in 2016
(worth a reported US$93 billion). Of this amount,
fully 640 Mt came from Australia and a further
PRICE
215 Mt from Brazil.
COMPLETELY REVISED this year, Iron Ore Market
l Supply of Iron Ore Report 2017 provides key information on supply and
MINE OPERATING
Global iron ore production grew 5% year-on-year in demand for the metal, industry costs, global trade, the
COSTS
2016, to a total of 2,106 Mt. This was primarily leading producers, and profiles of the most important
driven by an additional 30 Mt of direct shipping ore supplier and consumer regions.
EXPLORATION from Australia, which was the major source of new
EXPENDITURE fine-products entering the Chinese market. Lump cost supply. The production-weighted average cost for
production increased 26 Mt to constitute 15% of the seaborne market was only US$34/dmt in 2016,
MARKET global production, but concentrate output was broadly and the lowest cost producer achieved US$23/dmt.
OUTLOOK flat at one quarter of world production. The latter total
l Exploration & Project Pipeline
was despite a net reduction of 10 Mt in China (when
Iron ore exploration budgets fell in 2016 for the
measured as a 62% Fe equivalent material).
fourth consecutive year, with the estimated US$685
l Iron Ore Trade million expenditure representing a decline of US$460
Iron ore exports exceeded 1,513 Mt in 2016, million from 2015. Most of the fall can be attributed
compared with under 1,439 Mt in 2015, and the to Australia and China, which together accounted
TRUST FUND PROJECT seaborne market was more or less balanced for 62% for almost half of the global decline. The annual
The United Nations Conference Fe material. Technically, there was a small deficit in exploration budget for iron ore is now down 83% from
on Trade and Development’s iron units due to relatively low inventories in the final the peak of US$3.98 billion in 2012. Overall, about
(UNCTAD) Trust Fund Project on two quarters, but any price effect was dwarfed by 91 Mt/y of new global iron ore production was added
Iron Ore Information provides up- coking coal components. This tightness in the 62% in 2016. The lower iron ore prices led to some site-
to-date statistics and analysis on Fe market, compounded by other pricing factors and specific cut-backs, but permanent closures were led
developments in the world market financial speculation, contributed to considerable by the 10 Mt (62% Fe production equivalent) shut in
for iron ore. The Trust Fund, with China, with very little elsewhere.
price volatility. The net increase in global trade
S&P Global Market Intelligence as
was led by Australia, which contributed 44 Mt of
its information provider, produces
two unique products; The Iron incremental seaborne supply. The predominant IRON ORE STATISTICS DATABASE
Ore Market Report and Iron Ore products that entered the market were increases to Data coverage from 1970 to end-2016, covering all
Statistics Database. Pilbara blend tonnages and Carajas fines. of the iron ore producing companies and countries.
l Iron Ore Prices Statistics include data on:
Subscription offers:
Iron ore prices improved markedly in the second half • Production by country:
l The Iron Ore Market 2017, of 2016, having reached a low in mid-January last • Iron ore
PDF and printed copy year when 62% Fe prices fell below US$40/dmt CFR • Pig iron
¦ 1 year: US$ 1,200 for only the second time since the inception of the • Crude steel
¦ 3 year (minimum): S&P Global Platts’ index in 2008 (the other instance • Direct Reduced Iron
US$ 1,100/year was in December 2015). Prices reached a peak of • Pellet capacity, production and exports
l The Iron Ore Statistics Database US$84/dmt in early December 2016, averaging • Exports and imports of iron ore
US$58/dmt for the year, but lump premiums were at • Iron ore prices in Europe and Japan
¦ 1 year: US$ 1,800
historic lows by year end. • Freight rates for iron ore on main shipping routes
¦ 3 year (minimum):
US$ 1,600/year l Mine Operating Costs (new in this year’s report)
Payment against payment request, Iron ore producers have been able to reduce mining
by bank transfer only. costs substantially over the past four years, and the
mining industry as a whole now spends US$22/ dmt
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less than it did in 2013 due to tightened capital
ironore1@unctad.org controls, renegotiated contracts and the exit of high- http.//unctadstat.org