Iron ore demand supply scenario is globally increasing with time over rising steel productions. Predictions from various industrialists for Iron ore supply and demand scenario in 2014 are both positive as well as negative.
With the increasing Steel requirement across the nation, Iron ore’s demand and supply channels needs to be defined more clearly. In the present senairo, India’s Iron ore exports have fallen by 28% in Apr-Dec period of FY14 in comparison to same period of the corresponding fiscal. It has exported about 11.17 MnT in the period under review which was 15.55 MnT in the same period last year. Indian exports are affected mainly because of the ban imposed on Goa and the increased export duty by about 30% on Iron ore. This has reduced its supply to China by almost 100 MnT annually, over past 2 years.
According to Federation of Indian Mineral Industries (FIMI), the situation will persist unless government policies are changed. Whilst, Goldman Sachs predicts Iron ore’s supply growth will exceed over its demand growth in 2014. It assumes a surplus growth of about 80 MnT in the supply of raw material will take place from all over the world.
Vale, a Brazilian metals and mining corporation along with Fotescue Metals Group (FMG), an Australia-based firm have expansion plans to increase their production of the raw material in 2014. They plan to add about 150 MnT of the world’s total production in 2014. In addition, Australia-based mining giants, BHP Billiton might add about 48 MnT of annual production by 2016 and Rio Tinto plans to add another 115 MnT by Q2 FY15.
China, world’s largest user of Iron ore is forecasting to increase its imports in 2014 by about 33 percent with Sierra Leone to about USD 2 billion. However, with the declining steel production in China, it is also predicted that there would be less demand of the raw material from the country in 2014. The demand scenario from China thus remains quiet unpredictable.
We look forward to see a stable Iron ore demand and supply in 2014 with increasing production plans from most of the mining giants worldwide. All mining firms such as Rio Tinto, BHP Billiton, FMG and Vale, everyone plans to contribute more of the raw material in the overall output of the world in 2014.