Global iron ore production expected to rise 2% y-o-y in CY'24 to over 2.5 bnt

• World steel demand to rise nearly 2% in CY'24: WSA
  
  
• Australian iron ore output to remain flat despite greenfield projects
  
  
• Russian, Ukrainian supplies to increase y-o-y
  
  

Morning Brief: Production of iron ore globally is expected to edge up by around 2% y-o-y to 2.54 billion tonnes (bnt) in CY'24 from a level of 2.49 bnt in CY'23, as per data accessed by BigMint. In CY'24, global steel demand is likely to rise by 1.9% y-o-y to 1,849 mnt, as per WSA projection.

The supply of iron ore is expected to increase as investments in new projects and efforts to improve mining operations gather pace. Mining companies are actively working to meet the growing global demand for ore.

Country-wise production growth

• Australia, the world's largest iron ore producer, will see output rising to 958 mnt in CY'24, an increase of 1% y-o-y compared with CY'23. Australia is projected to see continued ramp up of greenfield projects from established producers Rio Tinto, BHP and Fortescue, as well as emerging producers such as Mineral Resources Limited, Atlas Iron and Magnetite Mines.
  
  
• Production in Brazil is expected to remain largely flat y-o-y in 2024. Vale targets production of nearly 320 mnt in the near term. Brazil is expected to raise iron ore exports by around 6% annually over to 2025. This will include Vale's S11D expansion, as well as new and expanded output by a number of other producers, including CSN's Casa de Pedra mine.
  
  
• China and India are expected to witness production growth of 5% and 6%, respectively, y-o-y in CY'24, although low-grade production in China is not likely to support import substitution. Higher production from Indian PSU and private miners is likely to push up output in CY'24 to over 300 mnt.
  
  

• Both Russia and Ukraine are expected to ramp up iron ore output in CY'24, despite the weight of sanctions hanging on Russia. Severstal and Evraz are the key Russian miners but Mechel, too, is investing in new mine development. Ukrainian supplies are slated to edge up by 12% y-o-y on gradual but steady resumption of operations by major producers as logistics constraints seem to have eased to an extent.
  
  
• South Africa is expected to witness just 2% y-o-y growth in production, as logistical problems ease and production, especially of major miners such as Anglo's Kumba, increases. Canada, on the other hand, is expected to log a 3% growth in ore production y-o-y even as expansion of Champion's Bloom Iron Lake project advances.
  
  

Outlook

Iron ore prices have remained more or less elevated throughout 2023 on Chinese steel output rising by nearly 2% y-o-y. Higher seaborne prices have supported extensive investments in mining and exploration. However, macroeconomic headwinds, especially in China, are likely to hit prices. Prices may be further affected by rising global supplies in CY'24.

If iron ore prices keep lower for long enough pressure on suppliers will inevitably rise. It will be interesting to see how global supply dynamics adjust to changing demand metrics in CY'24.