Industry Trend Analysis - Iron Ore - Brazil And Australia To Defy Global Slowdown - MAY 2015

BMI View : Global iron ore production will continue to grow o ver our forecast period to 2019 due to a pipeline of expansion projects by major miners in Australia and Brazil. However, some major iron ore producing countries will post weak growth figures , including China and Ukraine . China will see output slow due to global iron ore price weakness , which will force miners to cut output and halt new projects from coming online. Ukraine's output will contract as ongoing hostilities between the Ukrainian government and pro-Kremlin separatists have caused significant damage to mining infrastructure.

Global iron ore production will grow from 3,360 million tonnes (mnt) in 2015 to 3,640mnt in 2019. This represents an average growth of 2.5% year-on-year over 2015-2019, significantly lower than the average growth of 7.9% over 2010-2014. On the one hand, supply growth will be primarily driven by Australia and Brazil, due to expanding output by major miners, such as Rio Tinto, BHP Billiton, Vale and Fortescue Mining. On the other hand, miners in China, which operate on the higher-end of the iron ore cost curve, will be forced to cut output due to continued iron ore price weakness. We forecast iron ore prices to average USD62/tonne over 2015-2019, significantly lower than the USD97/tonne average over 2010-2014.

Brazil & Australia To Outperform

Majors To Grow Output
Select Companies - Iron Ore Mine Production (mnt)

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