Posted on 20 Feb 2025
Global iron ore exports up marginal 2% in CY'24; miners likely to keep supplies robust
- Chinese demand lifts overall volumes
- India sees dip amid domestic demand
- Steel demand recovery on cards in 2025?
Morning Brief: Global iron ore export volumes inched up a mere 2% to around 1,605 million tonnes (mnt) in calendar 2024 (CY'24) against 1,569 mnt recorded in CY'23.
Country-wise trend
Australia remained the largest exporter with 866 mnt, up a modest 1.4% followed by Brazil with 390 mnt and South Africa at 61 mnt, up 2.6% and 3.4% respectively.
What factors supported the modest increase?
- China's iron ore imports hit record high in CY'24: China, the world's largest iron ore consumer and importer, recorded a 5% increase in iron ore and pellet imports at 1,237 mnt in CY'24. A few factors propelled this increase. 1) Improved macro-economic developments, especially in the latter half of 2024, boosted sentiments somewhat. These included supportive policies to especially boost real estate and manufacturing. Additionally, the US Fed rate cuts created a favourable global economic environment, indirectly benefiting Chinese imports of iron ore. 2) China's crude steel production, despite showing marginal declines in some months, remained relatively stable through the year with total output at 929 mnt, down a mere 3% y-o-y. Iron ore inventories at Chinese ports, thus, rose to 143 mnt in CY'24, from 123 mnt in CY'23. 3) Benchmark Fe 62% Australian fines prices dropped a sharp $10/t y-o-y to $110.24/t CFR China last year amid weaker global demand and reduced steel production.
- Increased output from global miners: Supply at all major miners were up. Australia's BHP's iron ore production from its Western Australia mines rose 3% to 290 mnt in CY'24. Total iron ore sales from Pilbara on a 100% basis rose 4% to 290 mnt in CY'24. Production surged due to strong supply chain performance, and record volumes from the Central Pilbara hub following South Flank's ramp-up in FY24.
Fortescue Metals Group (FMG), Australia's leading miner, recorded a 2% increase in iron ore shipments to 194 mnt in CY'24 and 4% q-o-q to 49.4 mnt in Q4CY'24, leveraging well-maintained inventories and a streamlined supply chain especially in H2.
Brazil's Vale's production upped 2% to 328 mnt in 2024 - the highest since CY'18. Vale's performance was positively impacted by the successful commissioning of Brucutu's fourth processing line, which contributed to the site's highest quarterly production since 2019.
- India's iron ore production rises in CY'24: India's iron ore production provisionally rose around 2% to 284 mnt in 2024 amid various factors. 1) A 6% increase in crude steel production to around 149 mnt in 2024. 2) This also encouraged a growth in pellet and sponge iron production, which, in turn, increased demand for iron ore. Pellet production surged 10% to over 100 mnt last year while sponge output increased 8% to approximately 54 mnt. Resultantly, domestic demand for iron ore edged up around 4% to 242 mnt in CY'24. However, India's iron ore exports fell 14% to 38 mnt in 2024 (44 mnt in 2023) amid the domestic absorption.
Outlook
Worldsteel predicts, global steel demand growth at 1.2% in 2025 after two years of de-growth in 2023 and 2024. This would warrant increased iron ore production and exports.
Major global miners like Rio Tinto, BHP and FMG have thus kept their production guidance intact. Also, Vale's iron ore production guidance was increased to 325-335 mnt for CY'25 from the previous 323-330 mnt. Meanwhile, India's iron ore production is expected to increase to 305-310 mnt in FY'25 from around 280 mnt in FY'24, as per BigMint estimates.
Source:BigMint
