Industry Trend Analysis - Iron Ore To Hang On - AUG 2016

BMI View: Canada ' s iron ore producers will continue to focus on optimising operations at existing mines over investing in new projects, in the ongoing effort to cut costs in a subdued iron ore price environment over the coming quarters.

Canada's iron ore sector will see limited production growth, despite a strong project pipeline, as major miners prioritise cost cutting over project development due to persistently weak iron ore prices. We forecast the country's iron ore output to edge higher, from 39.6 million tonnes (mnt) in 2016 to 42.9mnt by 2020, averaging 1.9% annual growth during 2016-2020. This muted growth pace remains in line with the previous five-year average of 1.6% growth. The sector will remain export-oriented, with China, France and the Netherlands as the top destinations. In Q116, Canada's iron ore exports increased by 12.1% y-o-y, from 8.0mnt in Q115 to 9.0mnt. Canada's iron ore sector, while only 1.2% of global production, accounts for 2.5% of global exports.

Projects To Remain On The Backburner

Export Growth To Stagnate
Canada - Iron Ore Exports By Destination (%, LHC) 2015 & Monthly Exports (mnt, RHC)
Source: Trade Map

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