Iron Ore
Demand estimation
Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in colour from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4), hematite (Fe2O3), goethite, limonite or siderite. Hematite is also known as "natural ore". The name refers to the early years of mining, when certain hematite ores contained 66% iron and could be fed directly into blast furnaces. Iron ore is the raw material used to make pig iron, which is one of the main raw materials to make steel. 98% of the mined iron ore is used to make steel. World consumption of iron ore grows 10% per annum on average with the main consumers being China, Japan, Korea, the United States and the European Union. Iron ore mining methods vary by the type of ore being mined. There are four main types of iron ore deposits worked currently, depending on the mineralogy and geology of the ore deposits. These are magnetite, titanomagnetite, massive hematite and pisolitic ironstone deposits. Iron ore deposits are distributed in different regions of the world under varied geological conditions and in different geological formations. The largest concentration of ore is found in banded sedimentary iron formations of Precambrian age. These formations constitute the bulk of world iron ore resources. The top ten countries in the world in the order of their iron resources were the Common-wealth of Independent States (erstwhile USSR), Australia, Canada, USA, Brazil, India, South Africa, China, Sweden and Venezuela.
India is endowed with huge resource base of 25.24 billion tonnes of iron ore. Hematite and magnetite combined together. Reserves being at 7.06 billion tonnes and Remaining resources at 18.18 billion tonnes. Of the total reserve base of 7.06 billion tonnes, hematite accounts for 7.0 billion tonnes and magnetite at 0.60 billion tonnes
THE IRON ORE MARKET IN 2011
In 2011 the main changes has come from China while most other countries has experienced production levels and trade levels similar to the year before. Trading patterns has also transformed, and the Chinese dominance has now become even more massive. PRODUCTION In 2011 the world iron ore market continued to grow after the recovery from the recession in 2009 and a new all time high was reached at 1937.5 Mt, some 5.8 % higher than the previous year, 2010 with a production of 1830.6 Mt (see Figure 1). Output increased in most regions and countries except in Europe who saw a stagnant market, this includes the CIS countries. Oceania experienced the highest growth rates approaching 12.7 %. Among the major producers Australian, Brazilian and Chinese production increased by 12,7 %, 4.8 % and 2.1 % respectively. Indian production increased somewhat to 220 Mt. Concerning the production in China, due to problems of consistency between different statistics on the Chinese iron and steel industry, we revised our methodology for estimating iron ore production in 2009. Whereas in the past we have based our estimates on Chinese data for run-of-mine ore production, converting it to a standard of 63 % iron content, we are now making our estimates basing on a careful analysis of pig iron production in China and iron ore import statistics. We consider these figures to be more reliable than the Chinese gross figures for iron ore production without considering the grade or iron ore content of the ore produced. Developing countries accounted for 57.7 % of world iron ore production (down from 58.6 % in 2010), the CIS countries for 10.6 % (slightly down from last year) and the industrialised economies for almost 31.7 %. The decrease in the share of the developing countries was due mainly to growth of production in Australia - up over 55 Mt. Chinese production, on a comparable grade basis, was 321.9 Mt, or 16.6 % of total world production in 2011, down from 17.3 % in 2010 but below the top level of 20 % in 2007. In more general terms, for the long run, Australia and Brazil will be the dominating forces in iron ore production. India, which has large and good quality resources of iron ore, will be hampered by red tape and an on-going internal struggle of use. Over time, as the Indian steel industry grows, most of the iron ore will be used domestically. We also foresee a slow decline in Chinese output. If prices fall, it will decline more rapidly and a major Great Chinese shake-out will begin. With the increases in 2011 and despite the decline in 2009, world production of iron ore has grown by 95.7 % since 2002, or by 947.4 Mt. In developed market economies (including Eastern Europe), except Australia, iron ore production increased by 16.6 % during the same period. Australian production grew, however, by 160.6 % to reach 487.9 Mt. In the CIS countries, iron ore production in the same period increased by 29.5 %. Production in these countries, despite the recovery in recent years, still has some way to go to reach the record levels of 250 Mt that was attained in the mid-1980s, but production volumes are picking up. In Western Europe production seemed to have bottomed out at just below 30 Mt, until it declined to 21 Mt in 2009, due mainly to a fall by almost 26 % in Swedish production. In 2011, 33.1 Mt was produced in Western Europe and with the number of projects in the pipeline in the Nordic region we will probably see production increase in the region during the next couple of years. But the European share of world production is still less than 2 % and will probably stay around that level.
worlds largest iron ore producers
company vale group rio tinto group bhp billiton group arcelor mittal group fortescue metals group anben group anglo american group metalloinvest group evrazholding group LKAB Group metinvest holding group cliffs natural resurces CVG group Shougang beijing group unidentified mines NMDC group Imidro group CSN group US steel group poltavsky top 20 total capacity base Brazil UK Australia UK Australia China South Africa Russia Russia Sweden Ukraine USA Venezuela China India India Iran Brazil USA UK
(mt/yr)
capacity 446 350.2 271.9 77.8 55.8 51.2 50.3 46.3 45.9 44.8 44.3 42.4 40.3 37 36.8 33.7 32.1 28.9 24.3 24.1 1784 2177.3
This data relates to one month production of steel from various producers
2012 Austria Belgium bulgaria czech republic finland france germany greece hungary italy 656 660 60 467 380 1420 3602 120 138 2409 2011 630 818 75 461 403 1446 3813 141 143 2489
netherlands luxembourg italy hungary greece germany france finland czech republic bulgaria belgium austria 0 1000 2000 3000 4000 5000 2011 2012 other E.U united kingdom sweden spain slovenia slovakia
European union
romania
poland
luxembourg
netherlands poland romania slovakia slovenia spain sweden united kingdom other E.U european union
180
565 680 325 407 60 1255 452 863 185 148845
233
591 803 308 350 59 1464 479 839 155 15701
2011 canada cuba el salvador guatemala mexico trinidad and tobago 1160 20 10 50 1450 30
2010 1168 27 8 32 1544 62
8000 7000 6000 5000 4000 3000 2000 1000 0
2011 2010
united states
north america argentina brazil chile columbia ecuador
7705
10425 2011 480 3029 110 110 50
7051
9892 2010 474 3066 146 111 46
3500 3000 2500 2000
paraguay
peru uruguay venezuela south america
5
95 10 240 4129
2
64 6 261 4176
1500
1000 500 0
2011 2010
2011
2010
1200 1000 800
algeria
egypt iran morocco saudi arabia south africa
70
570 1120 60 439 560
6
530 1114 60 447 741
600
400 200 0 algeria egypt iran morocco saudi arabia south africa
2011 2010
africa/middle east
2819 2011
2897 2010 59048 5797 8433 5887 1857
70000 60000
china india japan south korea taiwan
60575 6000 9072 6011 1800
50000
40000 2011 30000 20000 10000 0 2010
asia
83459
81022
china
india
japan
south korea
taiwan
700
2011 australia new zealand 470 80
2010 645 64
600 500 400 australia 300 new zealand
oceania
550
709
200 100
total 66 countries
128376
126681
0 2011 2010
The global production of iron ore achieved an all-time high last year, confirming signs of a recovery of the steel industry after the 2009 recession, according to a new United Nations report. Published by the UN Conference on Trade and Development (UNCTAD) in cooperation with the Sweden-based Raw Materials Group, the Iron Ore Market 2011-2013 report states that the amount of iron ore produced globally in 2011 was 1.92 billion tons, representing a 4.7 per cent increase from 2010.
Iron Ore Market 2011-2013 also estimates that iron ore use will increase from 1.92 billion tons in 2011 to about two billion tons in 2012 and 2.08 billion tons in 2013. While an increase in demand will mean higher prices, the report predicts that prices will decline from 2013 onwards as supply gradually adapts to growing demand.
PRODUCTION: - India produced 212.6 million tonnes of iron ore in 2010/11 and exported 97.6 million tonnes. - There are about 500 mines in the country, half of which are operational. These are held by about 80 companies. - High-grade ores with 62-65 percent iron are produced mainly in the east and south. Low-grade ores with 50-60 percent iron are produced in the west and south. - The largest mining firm is state-run NMDC, which produces about 29 million tonnes annually, mostly for local sales. - The steel industry is a big domestic user of iron ore. Many steel companies have captive mines. EXPORTS: - India is the world's third-largest exporter after Australia and Brazil. Goa is India's biggest exporter. - China is India's biggest buyer, with its proximity helping it secure ores with low freight costs. India sells the bulk of its iron ore via the spot market. - The largest exporting company is Sesa Goa, a unit of London-listed Vedanta Resources. - Other large producers and exporters are Essel Mining, Rungta Mines, V.M. Salgaocar, MSPL and Chowgule. - Miners in Goa have lower costs as mines are located near the port, and so avoid road and rail charges.
CHALLENGES: - In its 2011/12 budget, the federal government hiked export duties on iron ore to 20 percent from 5 percent for fines and from 15 percent for lumps in a bid to cool domestic prices to help steel firms. - Shipments from Karnataka, source of a quarter of India's annual exports, have been banned since July 2010 and exports have yet to resume despite a Supreme Court order allowing shipments from April 20. - Port infrastructure is poor and vessels can wait up to seven days to load cargo. - Indian prices generally follow the global market, dominated by Australian and Brazilian miners, with China buying on a spot basis for its low-grade ore needs. - Slower exports could mean a surge in stocks of fines, complicating storage problems at mines. The Karnataka ban led to an estimated 15 million tonnes of unsold stocks of low-grade ore lying in the mines as of late July this year. FUTURES - The world's first iron ore futures debuted in India on Jan. 29, but volumes have been muted as participation of foreign players is not allowed. The production of iron ore in india has been increasing with an increased participation being shown by the private sector. The demand of the world for iron ore increased from 1.92 billion metric tons in 2010 to 2 billion in 2011 and is expected to rise to 2.08 in 2012 Indias share in the total production has been an approximate
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