Global Iron Ore Industry

Transcription

1 New and Updated A Ten Year Strategic Outlook for the Global Iron Ore Industry A Ten Year Strategic Outlook for the Global Iron Ore Industry contains very insightful information on the global iron ore industry. Shannon Hore, Vice President Procurement & Logistics, Emirates Steel Part 1: A Ten Year Strategic Outlook for the Global Iron Ore Industry l Latest production and export data for 70 plus global mining companies l Over 260 forthcoming projects are assessed and the latest updates provided l Demand and supply analysis and forecasts for the three main iron ore products used in steel making lump, fines and pellets l Detailed insights into key issues affecting the global iron ore industry l Comprehensive outlook for spot and contract iron ore prices Part 2: Dynamic Demand, Supply and Price Model for the Global Iron Ore Industry PLUS, this brand new research study also includes the option to purchase the dynamic demand, supply and price forecast model for the global iron ore industry: l Unique opportunity to own a fully interactive and dynamic forecast model l Conduct sensitivity analysis on demand, supply and price forecasts for lumps, pellets and fines l Allows you to model economic and supply shock scenarios alter parameters and run what-if scenarios for the global iron ore industry

2 New and Updated l What will be the market outlook for the iron ore market? l What is the outlook for Chinese iron demand over the next ten years? l Where are iron ore prices for pellets, fines and lump heading over the next ten years? l How quickly will additional supply from, and Guinea emerge? l How long will the iron ore market be characterised by increasing Chinese demand pushing against constrained global supply? Part 1: Study Part 1: A Ten Year Strategic Outlook for the Global Iron Ore Industry The power struggle between the Chinese and big three miners for supply dominance is set to only intensify. Moreover, the emergence of Africa and infrastructural constraints facing the industry most notably in s Midwest region means that this new study is never more topical as it is today. How will this impact on iron ore prices and what will this mean to global steelmakers over the next 5-10 years? Collectively the world s developed economies have been a major drag on global growth during much of Over the outlook period ( ) they are likely to be characterised by lacklustre performance as debt deleveraging persists. In contrast, the emerging market economies have considerable scope to ease fiscal policy to bolster global recovery should the outlook deteriorate. Annual global steel output growth decelerated by 3.8% to 3% (1,557m tonnes) in In Europe capacity was reduced, while in Asia stockpiles swelled and producer margins shrank. Although higher demand is expected over the forecast period, surplus steel capacity presents a headwind for steel prices and associated raw material input costs. Under the 12th Chinese five year plan, the country s steel industry will aim to improve its industrial concentration ratio and thereby increase its discipline when enacting short-term buying strikes to drive down raw material input costs. In addition the Chinese remain committed to foreign iron ore resource investments, to help reduce their dependency on the big three suppliers (BHP, Rio Tinto and Vale). However, the successes of their efforts are likely to be limited given their relative size among other market producers. Moreover as Chinese economic growth gears down, global demand growth for iron ore will likely settle at a more modest compounded average annual rate. As global iron ore supply increases more rapidly than demand in the medium-term, China s low grade, uneconomical mines are likely to close, weighing down on Chinese domestic production levels. In contrast Chinese demand will rise by 36.4% from 2012 to 1,495m tonnes by To offset the Chinese supply gap significant exports are expected from as well as from the big three, who are expected to retain their dominance in the industry, despite Chinese efforts overseas to dilute their concentration. Part 1 consists of Metal Bulletin Research s (MBR) independent written study, A Ten Year Strategic Outlook for the Global Iron Ore Industry, which examines, among other topics, what the future trends are for iron ore prices and the future strategic plans the iron ore majors are set to adopt. This new and independent study is designed to help you examine the current volatility in the iron ore market, and to plan your strategy through the next 10 years with our forecasts for supply, demand, trade and prices for the major types of iron ore pellets, DR fines and lump ore. 2

3 I would recommend Metal Bulletin Research as a unique provider of steel and its raw materials market analysis and forecasts Michael Amez, Manager, A.T.Kearney, USA Key issues examined in this study include: l This study gives the latest production and export data for 70 plus global mining companies, including historical and 10 year forecast data on by-mine production l Over 260 forthcoming projects are assessed and the latest updates provided. Which projects are likely to be commissioned on time, delayed, or cancelled altogether? l Demand and supply analysis and forecasts for the three main iron ore products used in steel making lump, fines and pellets using MBR s sophisticated in-house model l Detailed insight into key issues such as: The changing patterns in iron ore demand Industry consolidation Freight issues Pricing mechanisms Government regulations and carbon taxes Trends in mining operating costs Geopolitical issues in Africa Quantitative supply/demand, price sensitivity analysis (multiple real world scenarios) l The outlook for spot and contract iron ore prices. This study will uniquely aim to determine, and measure, how much any future iron ore price rise could be down to a degree of monopolisation on the part of iron ore miners and how much will be due to the actual supply and demand fundamentals l Extensive analysis of new African projects: existing mines and identified projects in Cameroon, Cote d Ivoire, Gabon, Guinea, Liberia, Nigeria, Senegal and Sierra Leone to include: details of technology, technical factors such as ore type and grade, product mix and product grades, equipment, operating procedures and transport estimates of operating costs per tonne by main cost item for each type of product (lump ore, sinter fines, pellet fines and pellets as appropriate) estimates of capital costs for each main type of asset (mine development, mining equipment, beneficiation plant, pellet plant, transport such as railway, pipeline, ports, etc. estimates of capital charges per tonne for each type of product Iron ore market likely to come under pressure as supply growth outpaces that of demand (m tonnes) Demand for all iron ore products expected to grow (m tonnes) Steel Production Iron Ore Demand Iron Ore Production Lump Sinter feed/dr fines Pellet m tonnes 1500 m tonnes f 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f Source: Metal Bulletin Research *Full data and forecasts available in the study f 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f Source: Metal Bulletin Research *Full data and forecasts available in the study 3

4 Key company supply profiles detailed: Examples include: BHP Billiton Rio Tinto Fortescue Metals Group Atlas Iron Western Plains Resources BC Iron Cazaly Resources Centrex Metals Atlas Iron (FerrAus) Atlas Iron (Giralia) IMX Resources Cape Lambert ltd Mount Gibson Iron Clad Mining Gindalbie Metals Golden West Resources Grange Resources Mineral Resources Forge Resources (previously Atlas Iron (Aurox Resources) Sinosteel MidWest Crossland Resources (50% stake previously held by Murchison Metals) Arrium (OneSteel) Cliffs Asia Pacific Iron Ore Holdings Territory Resources (Noble Group) Citic Pacific Australasian CSN Vale Rio Tinto Brasil Mineraço es Brasileiras Reunidas Crusader Resources MMX Anglo Ferrous (Anglo American) Samarco BML MHAG Ferrous Resources ArcelorMittal Serra Azul & Andrade London Mining IOCC ArcelorMittal Mines of Consolidated Thompson (Cliffs) New Millennium Wabush (Cliffs) Anglesey Mining Cliffs Natural Resources (Cleveland Cliffs) GIIC (Bahrain) Rio Tinto (Simandou) BSG Resources Guinea Bellzone Sesa Goa ESSAR ISPAT (JSW Ispat) SAIL NMDC CMP Admiralty Resources JSW & Minera Santa Fe (JV) Vallenar Iron Company - Australis Mining (CMSB) SNIM Xstrata (Sphere Mineral (Guelb el Aouj & Askaf) Shougang Hierro Peru Cardero Resources Corporation Minera Sierra Grande/China Metallurgical Group Assmang Kumba Iron Ore Palabora Mining CVG Ferrominera Orinoco LKAB USA Bahrain Guinea Guinea Guinea Mauritania Mauritania Peru Peru Argentina South Africa South Africa South Africa Venezuela Sweden 4

5 Contents (Part 1) Call our hotline on +44 (0) or visit for a detailed synopsis of each chapter of the study 1 Executive summary 2 The macroeconomic environment The global economy 2.2 China 2.3 Asia 2.4 Middle East and Africa 2.5 Americas 2.6 Western Europe 2.7 Eastern Europe and Russia 2.8 Economic case statistics Base case economic statistics Best case economic statistics Worst case economic statistics Exceptional worst case economic statistics 3 Crude steel production 3.1 Overview 3.2 Outlook 3.3 Environmental considerations 4 BFI and DRI/HBI production 4.1 Overview 4.2 Outlook 5 Iron ore pellets and feed 5.1 Pellet demand overview 5.2 Pellet demand outlook 5.3 Pellet supply overview 5.4 Pellet supply outlook 5.5 Capacity additions 5.6 Global pellet trade 5.7 Global pellet feed trade 6 Iron ore lump 6.1 Lump demand overview and outlook 6.2 Lump supply overview and outlook 6.3 Global trade 7 Iron ore sinter, sinter feed and DRI/HBI fines 7.1 Sinter and DRI/HBI fines demand overview and outlook 7.2 Sinter feed and DRI/HBI fines supply overview and outlook 7.3 Global trade 8 Iron ore prices and production costs 8.1 Introduction 8.2 Market balance 8.3 Scenarios Best case Scenario Worst case scenario Exceptional worst case scenario Increase of 2% in global supply relative to the economic base case Decrease of 2% in global supply relative to the economic base case 8.4 Long-term price projections 9 Iron ore company and project profiles 10 Appendix A: Supply profiles 11 Appendix B: Review tables 12 Appendix C: Iron ore mine operating cost analysis 13 Appendix D: Extensive analysis of new African projects: Existing mines and identified projects in Cameroon, Cote d Ivoire, Gabon, Guinea, Liberia, Nigeria, Senegal and Sierra Leone to include: details of technology, technical factors such as ore type and grade, product mix and product grades, equipment, operating procedures and transport estimates of operating costs per tonne by main cost item for each type of product (lump ore, sinter fines, pellet fines and pellets as appropriate) estimates of capital costs for each main type of asset (mine development, mining equipment, beneficiation plant, pellet plant, transport such as railway, pipeline, ports, etc. estimates of capital charges per tonne for each type of product 5

6 Part 2: Dynamic Demand, Supply and Price Model for the Global Iron Ore Industry Conduct sensitivity and market simulations on the global iron ore industry This will uniquely allow your company to manipulate and/or update our data with the option of changing specific parameters, modelling economic scenarios and introducing new supply. Part 1 of the service will present results and analysis from our base case scenario as generated by our unique and dynamic in-house model. However, in Part 2, we make also available MBR s complete in-house dynamic model which comes as an additional service to the written study or as a stand-alone basis. MBR is offering you the opportunity to our entire in-house model to provide a fully transparent view of the methodology MBR uses for our forecasts and market analysis. This will allow you to take confidence when making substantial investment decisions as well as update any change in parameters we have assumed in the model. Part 2: Dynamic Model Dynamic forecast model in MS Excel l Fully interactive and dynamic forecast model directly accessible in MS Excel l Unique occasion to access MBR s in-house model that allows us to formulate and drive all our research and market forecasts we present l Complete demand, supply and price forecast model for lump, pellets and fines l Allows the user to model economic and supply shock scenarios 6

7 Consumption Balance Production Metal Bulletin Research Iron Ore Model GDP Growth Industrial Production Crude Steel BFI production DRI / HBI production Pellets Lump Sinter Pellets Lump Sinter DR fines Sinter Sinter feed Production and export data for 67 major mining companies across the globe Pellets Lump Sinter Feed/DRFines Pellet feed } Production Pellets Lump Sinter Feed/DRFines Pellet feed } Exports Global agglomerate and unagglomerate iron ore trade data (excluding iron pyrites) Total iron ore supply Total iron ore demand Price Source: Metal Bulletin Research 7