The iron ore market Mining on top Helsinki - Anton Löf, Raw Materials Group
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The iron ore market Mining on top Helsinki - Anton Löf, Raw Materials Group

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The iron ore market Mining on top Helsinki ...

The iron ore market Mining on top Helsinki
Anton Löf, Raw Materials Group

Mining On Top: Helsinki 2013
16-17 September 2013 | Helsinki

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  • 1. Anton Löf (Magnus Ericsson) Senior Iron Ore Analyst, Raw Materials Group anton.lof@rmg.se The iron ore market Mining on top Helsinki
  • 2. About IntierraRMG • 30 years leadership in data, mapping, analysis and reporting. • Lease ownership, company evaluations, M&A, due diligence, production statistics and project pipeline. • Market and project reports, material flows analysis and mineral economics policy Disclaimer: IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy, completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of the information contained herein and assume no responsibility for the use of the information.
  • 3. Raw Materials Group • Part of the IntierraRMG group since 2012 • 30 years industry leadership in data, mapping, analysis and reporting. • IntierraLive and Raw Materials Data. • Strategy development – Mining companies, equipment & service • Mineral policy, investment promotion – Governments, International organisations • Pre-feasibility/Feasibility studies – Financial institutions, companies
  • 4. • UNCTAD Iron Ore Trust Fund. • Steel production • Iron ore production • Iron ore trade • Iron ore prices • Corporate concentration • Capacity • Outlook • Summary Outline
  • 5. UNCTAD Iron Ore Trust Fund • 1987, since 2002 with Raw Materials Group of Sweden. • Two annual publications –Iron Ore Market Review in May –Iron Ore Statistics in September • Half year update in November • Financed by sales and contributions from Australia, Brazil, Canada, Sweden and US. • Contact ironore1@unctad.org for information. • Iron ore market available in Chinese
  • 6. Steel production
  • 7. Crude steel production 0 200 000 400 000 600 000 800 000 1 000 000 1 200 000 1 400 000 1 600 000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Rest of the world China
  • 8. Iron ore supply
  • 9. Iron ore mines 2012 Source: Raw Materials Data Iron ore, 2013.
  • 10. Global iron ore production Source: UNCTAD, Raw Materials Data Iron ore, 2013. 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Australia China India Brazil Russian Federation Other
  • 11. Chinese production 0 200 400 600 800 1 000 1 200 1 400 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 China iron ore production China ore production (unconverted)
  • 12. RMG top companies 2012 Rank 2012 Controlling entity Country Controlled Share of Total production (Mt) World prod % Rank 2011 1 Vale (Cia Vale do Rio Doce) Brazil 320 17.2 1 2 Rio Tinto UK 197 10.7 2 3 BHP Billiton Australia 187 10.0 3 4 Fortescue Metal Group Australia 61 3.3 6 5 State of India 1) India 59 3.2 5 6 ArcelorMittal Luxemburg 58 3.1 4 7 Anglo American UK 47 2.5 7 8 Cliffs Natural Resources USA 46 2.5 8 9 Metalloinvest Russia 40 2.1 9 10 System Capital Management Ukraine 31 1.7 10 Total, 10 largest 1046 56.3 Total, World 1863 100.0 Source: Raw Materials Data Iron ore, 2013.
  • 13. Iron ore trade
  • 14. Global iron ore exports Source: UNCTAD, Raw Materials Data Iron ore, 2013. 0 200 400 600 800 1 000 1 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Australia India South Africa Brazil Canada CIS Other
  • 15. Global iron ore imports Source: UNCTAD, Raw Materials Data Iron ore, 2013. 0 200 400 600 800 1 000 1 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Other EU27 Japan Korea, Republic of China, Taiwan Province of China
  • 16. Chinese iron ore imports Source: Raw Materials Data Iron ore, 2013.
  • 17. Iron ore prices
  • 18. Iron ore prices, TSI 62 % Fe 0 50 100 150 200 250 05/01/2009 16/06/2009 30/07/2009 15/09/2009 29/10/2009 14/12/2009 01/02/2010 17/03/2010 05/05/2010 21/06/2010 04/08/2010 20/09/2010 03/11/2010 17/12/2010 04/02/2011 22/03/2011 11/05/2011 27/06/2011 10/08/2011 26/09/2011 09/11/2011 23/12/2011 10/02/2012 27/03/2012 15/05/2012 02/07/2012 15/08/2012 01/10/2012 14/11/2012 02/01/2013 26/02/2013 16/04/2013 06/06/2013 23/07/2013 USD TSI 62 % Fe CFR Tianjin Port US$/t Iron ore fines 62 % Fe, USD/t Average yearly price
  • 19. Corporate concentration
  • 20. Production - Increased geographical concentration 18% 22% 11%8% 9% 6% 6% 20% 2000 Australia Brazil China India Russian Federation Ukraine United States Others 28% 20% 15% 8% 6% 4% 3% 16% 2012 Australia Brazil China India Russian Federation Ukraine South Africa Others • In 2000 the 3 largest producing countries had 51% of the market. In 2012 it had increased to 63% • In 2000 the 5 largest producing countries had 68% of the market. In 2012 it had increased to 77%
  • 21. Export - Increased geographical concentration • In 2000 the 3 largest exporting countries had 71% of the market. In 2012 it had increased to 76% • In 2000 the 5 largest exporting countries had 80% of the market. In 2012 it had increased to 82% 33% 32% 7% 5% 4% 4% 3% 12% 2000 Australia Brazil India Canada South Africa Ukraine Sweden Others 42% 29% 5% 3% 3% 2% 2% 14% 2012 Australia Brazil South Africa Ukraine Canada Russian Federation Sweden Others
  • 22. Corporate control over time 0 10 20 30 40 50 60 1985 1990 1995 2000 2005 2010 2011 2012 % 1 3 10 Source: Raw Materials Data
  • 23. Capacity
  • 24. Capacity additions 2013-2015 • Total project pipeline contains 771 Mt of iron ore capacity to come on stream within the next 3 years. • The project pipeline are based on companies statements on project completion • Not all projects will be finalized in time but delays rarely exeds 3 years. • It can be assumed with some degree of confidence that around 500 Mt with a low of 390 and a high of 580 Mt of new capacity will come on stream in the period to and including 2015. 0 50 100 150 200 250 300 350 400 2010 2011 2012 Mt Capacity to come online within the next 3 years Possible Probable Certain
  • 25. Outlook
  • 26. Iron ore projects Source: Raw Materials Data Iron ore, 2013.
  • 27. Project pipeline by region 32% 29% 13% 11% 11% 4% Oceania Latin America Africa Europe Asia North America
  • 28. Chinese crude steel production 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec kt 2009 2010 2011 2012 2013
  • 29. Global iron ore cash cost Source: Raw Materials Data Iron ore, 2013.
  • 30. Conclusions Summary Molybdenum drawing: Kaianders Sempler.
  • 31. Summary We estimate that the world iron ore market will be characterized by tight conditions for at least a few years to come, although prices will decline, as new production comes on stream, they will remain on a high level. The main factors influencing the market include: • Chinese steel demand, While demand drivers remain in place, will grow considerably slower than during the past decade, while demand in the rest of the world will pick up. • World steel demand and production will increase at rates that are high in a historical perspective but nevertheless lower than during the previous decade. • Increasing supply constraints. • Chinese iron ore production will remain significantly lower than domestic demand.
  • 32. Anton Löf PO Box 3127 SE-169 03 Solna, Sweden anton.lof@rmg.se Tel: +46-8-744 00 65 Fax: +46-8-744 0066 www.rmg.se www.intierrarmg.se Thank you ! NIckel drawing: Kaianders Sempler.
  • 33. Metals first isolated in Sweden/Finland Please visit www.rmg.se