Commodity Market Report
Global Iron Ore Strategic Planning Outlook – Q1 2022
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
With global pig iron production on track to remain close to last year’s record high and iron ore supply chains stretched, 2022 is shaping up to be another tight year for seaborne iron ore. We have raised our CY 2022 price forecast by 50% to $135/t CFR. No change to our view that prices will trend lower over the next five years in anticipation of easing supply constraints and stagnating/declining Chinese demand, but we have moderated the timing and scale of the future price "correction". We have raised our long term (mid-cycle) price to $75/t CFR (real 2022 terms) versus our previous forecast of $70/t. The driver is primarily “cost push” rather than “demand pull”. Rising energy, labour and other input costs all play a role, along with heightened geopolitical risk and rising ESG compliance costs. Our current assessment of iron ore market dynamics and long term price outlook are presented in this report.
Table of contents
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What’s changed since Q4 2021?
- Overview
- Demand revisions
- Supply revisions
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The five-year view - what’s changed?
- Seaborne Trade
- Price Forecast
- Simplified market balance and implied clearing price:
- Price versus costs
- Premiums and discounts
- Price outlook for lump
- Price outlook for pellets
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The long term outlook (post-2026)
- Forecasting rationale
- Long term price forecast raised to $75/t CFR (previously $70/t)
- Incentive price analysis
- Key swing factors that could impact the long-term view:
- Overview
- Asia
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China
- Steel production in China to stay rangebound in 2022 and contract in long term
- EAF penetration to slow down led by delay in carbon peak deadline
- Path to carbon neutral to weigh on iron ore demand
- Iron ore imports to decline slower than consumption
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India
- Indian steel production to rise 8% in 2022
- Indian steelmakers to add 90Mt in the next decade
- India iron ore consumption to rise 3.3% through 2050
- 27 more item(s)...
Tables and charts
This report includes the following images and tables:
- Tier 3 and Chinese domestic supply requirement
- Implied iron ore price 2022 and 2023
- Price and cash cost, by percentile contestable market, CFR China)
- Premium and discount for high/low grade iron ore (US$/t and %)
- Iron ore lump premium
- Blast furnace pellet premium
- Overview of global steel and iron ore market
- China key demand data
- JKT demand dynamics
- Korean iron ore demand to overtake Japans'
- S.E.Asia Iron ore consumption
- Indonesia to gain share in S.E.Asia
- 45 more item(s)...
What's included
This report contains:
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