Global iron ore production growth will accelerate in the coming years, according to market analyst Fitch Solutions latest industry report. Fitch forecasts global iron ore mine output growth will average 3.6% over the 2021 to 2025 period, compared with -2.3% over the previous five years.
According to the research firm, this will lift yearly production by 571 million tonnes by 2025, compared with 2020 levels, with supply growth primarily driven by Brazil and Australia.
“Brazilian miner Vale has aggressive expansion plans, while miners in Australia, including BHP, Rio Tinto and Fortescue, will re-invest currently buoyant profits into additional production,” says Fitch.
“This will bring an end to the stagnation that has persisted since iron-ore prices hit a decade-low average of $55/t in 2015.”
Fitch forecasts iron ore production in Australia to grow at an annual average of 1.8% over 2021-2025.
The company expects China’s iron ore production to also rise in the next 3-4 years as the country works to increase its self-sufficiency and reduce Australian imports.
“We forecast production to reach a peak of 1.07 billion tonnes in 2025, before declining once again.”
Brazil to lead growth
Fitch says Brazil’s iron ore production will increase at an annual average rate of 10.6% over 2021, to increase from 397 million tonnes in 2020 to 542 million tonnes in 2025.
“Production growth will slow over the longer term and we forecast average annual growth of 1.8% over 2026-2030, which would take annual output to 592 million tonnes by 2030,” said Fitch.
The iron ore price rose again on Friday, buoyed by hopes of a pick-up in steel demand in China.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $157.55 a tonne, up 1.3% from Thursday’s closing.