The global iron-ore market will stay well supplied up to 2027, supported by expanding output in Brazil and India, says Fitch Solutions’ Macro Research unit.
Global iron-ore production will grow modestly from 3.36-billion tonnes to 3.41-billion tonnes by 2027, representing a yearly growth rate of 0.5%, which is a significant slowdown compared with the 5% a year growth that was recorded between 2008 and 2017.
Fitch reported that, on the one hand, supply growth will be primarily driven by India and Brazil, where major miner Vale is set to expand output with its new mine. On the other hand, miners in China that operate at the higher end of the iron-ore cost curve, will be forced to cut output, owing to lower ore grades. Brazil’s ore grade averages 65% while China’s ore grades hover around 21.5%.
Fitch forecasts India’s iron-ore output to grow from 209-million tonnes this year to 221-million tonnes in 2027. It further expects Brazil’s iron-ore output to grow from 453-million tonnes this year to 582-million tonnes by 2027. Brazil will remain the top global iron-ore exporter for the period.
Fitch forecasts China’s iron-ore production to decline from 1.29-billion tonnes this year to 1.24-billion tonnes by 2027. “While we expect the overall volume growth of China’s iron-ore imports to decelerate, the country’s tightening environmental standards will keep demand