The 2017 issue of the report provides key information on supply and demand for iron ore, industry costs, global trade in 2016, as well as expectations in 2017. The report also includes information on the leading producers and profiles of the most important supplier and consumer regions.
Despite soft Chinese consumption and low prices for most of the year, a late surge meant the iron ore industry saw gains in production and exports.
The iron ore industry saw a marked improvement last year after the slower growth, lower prices and squeezed profit margins suffered in 2015, according to the new UNCTAD Iron Ore Market Report.
The report shows the key indicators of demand and supply, seaborne trade and price, all made gains through the year and says the market outlook is steady.
"The market for base metals such as iron ore is a yardstick for the global economy, and in recent years it has fluctuated closely with the state of emerging and developing countries' economies," said Ms. Yanchun Zhang, Chief of UNCTAD's Commodity Policy Implementation and Outreach Section.
![Iron Ore Market Report](/sites/default/files/inline-images/2017-07-31_ironOre_400x194.jpg)
1) The Iron Ore Market Report
2) Iron Ore Statistics Database.
"The report's comprehensive analysis of the global iron ore market will be useful for both professionals interested in the iron ore market but also for developing economies with huge needs to import the metal for domestic industrial production."
Although Chinese consumption remained relatively low, and prices did not improve for much of 2016, the market started to improve late in the year, with prices exceeding US$80/dry metric ton (dmt in December 2016.
Global iron ore production grew 5% year-on-year in 2016, according to the report, hitting a total of 2,106 million tons (Mt). This was primarily driven by an additional 30 Mt of direct shipping ore from Australia, which was the major source of new fine-products entering the Chinese market.
Iron ore exports exceeded 1,513 Mt in 2016, compared with under 1,439 Mt in 2015, and the seaborne market was more or less balanced. The net increase in global trade was led by Australia, which contributed 44 Mt of incremental seaborne supply. The predominant products that entered the market were Pilbara blend fines and Carajas fines.
Producers of iron ore have reduced mining costs substantially over the past four years, says the report, and the mining industry as a whole now spends US$22/dmt less than it did in 2013 due to tightened capital controls, renegotiated contracts and the exit of high cost supply. The production-weighted average cost for the seaborne market was only US$34/dmt in 2016, and the lowest cost producer achieved US$23/dmt.
Iron ore exploration budgets fell in 2016 for the fourth consecutive year, with the estimated US$685 million expenditure representing a decline of US$460 million from 2015. Most of the fall can be attributed to Australia and China, which together accounted for almost half of the global decline. The annual exploration budget for iron ore is now down 83% from the peak of US$3.98 billion in 2012.